Add employee benefits with Square Payroll
About employee benefits
With Square Payroll, you can set up taxable benefit deductions and contributions for your employees.
When you run payroll, we automatically calculate the benefit deductions and contributions and leave the amounts in your bank account for you to distribute to the applicable benefit providers. Based on the benefit category you select, we determine the taxability and reporting requirements for each benefit to ensure your taxes and tax forms are accurate.
Square Payroll supports the following employer sponsored benefits:
Health Savings Account (HSA)
Health Insurance (Section 125 Plan)
Flexible Spending Account (FSA)
Dependent Care Flexible Spending Account
Simple IRA
401K Retirement Plan
Roth 401K Retirement Plan
403B Retirement Plan
Roth 403B Retirement Plan
457(b) Deferred Compensation Plan
Roth 457B Deferred Compensation Plan
Roth IRA
Fringe benefits or other custom benefit types; life, disability, and accident insurance; Qualified Small Employer Health Reimbursement Arrangement (QSEHRA); Simplified Employee Pension Plan IRA; and benefit deductions for 1099 Contractors are not supported.
Before you begin
You can only add benefits to existing employee profiles. Learn how to add a team member to Square Payroll.
Benefits are only available for W-2 employees at this time.
You can create and deactivate benefits from your Square Dashboard.
Create a benefit
Sign in to your Square Dashboard and select Staff & payroll > Team > Team members.
Select the team member you want to add a benefit to.
When the team member panel opens, select Payroll.
Select Benefits and garnishments.
Select Add benefit.
Select an existing benefit from the drop-down menu or select Create new.
Enter a Name and select the Type from the drop-down menu.
For Employee Deductions, choose your calculation method, enter the deduction amount or percentage, and enter any existing deductions to date.
To add a deduction limit for the calendar year, select Add limit and enter the deduction limit amount.
For Company contributions, choose your calculation method, enter the amount or percentage, and enter any existing contributions to date.
To add a contribution limit for the calendar year, select Add limit and enter the contribution limit amount.
Select Save.
Once you create a benefit, you can apply it to any applicable team member.
Deactivate a benefit for an employee
Benefits automatically become inactive if a $0 limit is set or the year-to-date deductions exceed the limit. You can also manually delete benefits in your Square Dashboard.
Sign in to your Square Dashboard and select Staff & payroll > Team > Team members.
Select the team member with the benefit you want to deactivate.
When the team member panel opens, select Payroll.
Select Benefits and garnishments.
Select the benefit you want to deactivate.
Select Delete > Delete benefit.
Deactivating a benefit for one team member does not deactivate the benefits for all team members. If you want to deactivate the benefit for multiple employees, repeat this process for each team member.