Payroll Q&A: Ask our product team anything about Square Payroll

[isabelle]

Hello Seller Community members! 👋 

On Thursday, December 16th, we hosted a Q&A with @swo and our Payroll team. With the end of 2021 fast approaching, the new year is always an ideal time of year to switch payroll providers. Switching at the end of the year simplifies the setup and tax filing process so you can kick off the new year on the right foot.

Recap on the latest features from earlier this year:

• Multiple Tax Jurisdiction - Square Payroll now supports payroll processing and tax filings for employees that live and work in different state or tax jurisdictions
• Tip Splitting by Transaction & Shift - With Square Payroll, sellers now have the ability to configure tip eligibility per job and tip pooling per shift. 
• Commission Tracking & Importing - Square Payroll users can now automatically import their team members’ commission from their Sales into their Payroll. 
• Split Paychecks - Team members can now opt into splitting a desired percentage of their direct deposit between two different bank accounts.

A few example questions:

• I'm considering Square Payroll for my retail store, what differentiates this service from other products?
• How long does it take for my employees to receive their direct deposit?
• If Square allowed me to do "______" with my payroll settings, it would save me so much time.

[pstafford1]

Hello,

I signed up several contractors for payroll who were sent a link by SQUARE to an app to open so that

they could input their personal information.

However, several have replied back that the app didn't work or they couldn't get in.

Please advise.

Thank you,

Penne Stafford  

[swo]

Hi @pstafford1! Sorry to hear your contractors are having a hard time setting up their accounts. You can view instructions here on getting them set up. They should have received an email inviting them to download the Square Team app (not Square Payroll). Once they received the welcome email, they can actually set up their account on either the web or they can use the Square Team App. If you’re still having trouble, please don’t hesitate to contact our Support Team for some one on one assistance.

[goshawk]

I would love to use Square Payroll, however, the way you do tips doesn't fit our business. I own a restaurant.  We don't pool tips, we distribute tips differently based on roles. For instance, each staff member contributes 4% of gross sales to staff tip-outs. Of the 4%, 50% goes to bartenders on shift and 50% to support staff, e.g. kitchen and host/bussing team members.  Similar rules are in place for bar staff, where there contribution of tip-outs goes directly to support staff. Give me the flexibility to build custom rules into the tips structure and I'd love to move my payroll business over to Square from Quickbooks. 

Best,

Eric

[KatM]

Eric, That sound logical, but sort of complex too. Curious. Can you set up those type of rules in Quickbooks?  How I am handling it is: I have "Import tips" turned OFF, then I calculate the division of tips manually and enter them on each employee's paycheck.

[goshawk]

A spreadsheet KatM. Crazy manual but I have it down to a science and can get through a few weeks in a matter of an hour. But seems like this could go faster by adding rules that I can define based on the amount of tip-outs. Essentially removing my manual process by inserting our percentages. 

[kicksclub]

Interested in your work around for tips. Tipping allocation is the top reason for my hesitation to use Square payroll. I am in a bar setting where customers are free to roam and maybe waited on by several different people, at the end of the shift the tip is divided by how many times customer was waited on by employees. Employee tips are recorded each shift and then totaled for next 2 weeks on payroll. That sounds like that is what you are doing for Square. Is that correct?!  Appreciate your input! Beth

[KatM]

Beth, apologies - I did not see the notification of your response. I hope you have figured out something workable. Sounds like we are working similarly by manually calculating the tips and adding them to the employee's paychecks.

[swo]

Hi goshawk, Thanks for reaching out! Unfortunately, we do not currently support tip pooling/splitting by department or percent. That being said, if you are currently calculating tips manually (outside of Square and Quickbooks) then you can still utilize Square Payroll. You can edit and manually type in paycheck tips, hours, etc. when running payroll with Square, you’re not required to use the tip importing function. 

[Volition]

Hi there!

I would love an option that offers Commission or Hourly, whichever is greater. I have my stylist punch in for hourly but if she does a higher amount in commission sales I pay her that instead of the hourly. When I do the import right now it imports both her hourly and commission so I have to delete one or the other. 

[swo]

Hi! Currently we don’t have rules in place to automatically pick wages the way you’ve described, so deleting the lower of the two seems like the easiest route for now. However, thanks for making the suggestion. We will definitely consider how we can support something like this in the future!

[Donnie-M]

Tips are a big thing in the restaurant sector.  I currently do not use square payroll, but we do not use any of the ways square has chosen to split tips.  We split the staff tips by pay period and total hours worked.  We offer counter service, so our customers do not designate a tip to an individual team member when they pay.  We consider that every person that works on that shift, from doing dishes, ringing up the sale, making the order, bagging and handing it out, doing prep, answering the phone, are all integral to each and every sale that happens in our stores.  We have some bigger invoiced orders that are paid and tipped after the sale, so assigning tips to the day the sale "concludes" doesn't fit either.  The ability to offer a higher salary through customer tipping is integral to many small businesses.  We regularly add $2+ dollars per hour to our staff's wages through tipping alone.

I have researched our laws in our state and the newest advice from the FLSA/DOL and we do not take any tip credits and fully disclose our tipping procedures to all staff that are eligible for tips and promptly pay all tips on each payday for the immediately preceding pay period.

Is there a specific legal reason square payroll has chosen not to continue this ability to split by pay period across hours worked? or is it a more technical issue?

Will it still be possible to manually split tips in the payroll system? and if so, could a report from the dashboard be implemented to streamline this process with each seller doing their own manual tip input?

We accomplish our tips by using a spreadsheet and macro using the existing reporting available from square, so I hope this is something that square chooses to implement and keep rather than sunsetting this ability.  Also, from research into other leading restaurant tip software/payroll providers, they are continuing to offer this ability.

Thank you for the insight into this issue.

Donnie-M

[mynameiscurt]

I am also interested in this issue for similar reasons. The new system seems specifically geared toward traditional restaurants, which we (and many of your other customers) are not. Pooling tips by pay period has worked for us for 10 years, and the ability to do this automatically was a large reason we moved our payroll to you last year.

We run a walk up gelato shop, typically with one employee taking orders and the other packing. They divvy all side work and cleaning equally. Tipping based on who takes the order is not fair in our situation. Likewise, simply pooling tips by workday poses a problem as well. Like the guy above, we have bulk orders paid/tipped at random times, filled by different people than whoever happened to be standing at the counter when the order came in. However, our primary issue is that our business owner, who does not take tips, regularly works actual shifts and it is not appropriate that other employees scheduled that day "luck out" by adding her share to their count. Pooling tips by pay period, excluding her from the tip pool, allowed that extra to be divvied proportionally and automatically between everyone. 

Good on you for adding more features, but please reconsider getting rid of this option. Whatever we end up doing to adjust to your new policy will certainly not be making our business any easier to run.

[swo]

Hi Donnie-M and mynameiscurt! Thank you for your question and feedback. We hear you! Discontinuing tip splitting by pay period was a decision that was not made lightly. As we work towards consolidating and expanding labor-related functionality within Square, this was a feature we were simply unable to continue supporting. We know this decision may disappoint some businesses so we plan to continue building on the tip pooling and splitting functionality within Square. In the meantime, our hope is that the ability to pool and split tips by workday may work as an alternative for most businesses. Please note that existing Payroll customers will still be able to pool and split tips by pay period until April 1st, 2022 (extended from December 1, 2021)! 

Additionally, Donnie-M, Payroll will continue supporting manually entering or adjusting tips, so the spreadsheet method you currently use should still work.

[Donnie-M]

@swo I would like to propose a solution that can bridge the gap.  Would it be possible to add a custom report that utilizes the "team sales" report and would allow a simple report that has total tips and total hours worked over whatever period selected.  With a simple report square could generate the information to split tips by any specific period of time and by giving customers that information in a user friendly format, the seller can then manually enter the tips during payroll.

While this would not make it seamless, it would allow square to minimize the inconvenience and still support counter service style/quick service restaurants with custom tip pooling options.  Also, maybe there is an app marketplace option that could be integrated to do this.

Do you think this would be a completely crazy idea?

Donnie-M

[murraystreats]

One of the issues we encounter is also re: tip splitting. 
We take custom orders on our website or in store for baked goods, and that tip is allocated to all the team members that are clocked in when that transaction takes place. I think our baker should be getting those tips, but she works early in the morning, and orders come through all the time. Wish there was a way to tag certain items so that she would always get those tips, right now I go back in and recalculate manually.  

Also, PLEASE add a way to automatically send paystubs via email to employees. We still use homebase (because of Square Schedule issues) and it makes it really clunky for my employees to log in to Square to get their stubs every time. That would honestly be a huge help! Right now I download all of the paystubs and email them out one by one. 

[swo]

Hi @murraystreats, thanks for your feedback around assigning tips by item! This is a request that we will look into as we continue to build out and iterate the tipping functionality. 

Additionally, your employees should be automatically getting emails when you run payroll containing a preview of their net pay and a link to their pay stub. For security reasons, we don’t attach the paystub PDFs directly within the email. As an alternative to your employees logging in to their Square Employee Dashboard to view and download their pay stubs, they can download the Square Team App. This app allows your employees to easily view their pay stubs, update personal information, change direct deposit methods, and more.

For more details, have a look at this article: Square Team App for Team Members.

[Cdadey]

We have 2 locations with different LLC's. Would love it if We could have both locations under 1 payroll account. Any plans on making this possible?

Thanks

Chris

[swo]

Hi @Cdadey, we’re looking forward to bringing you on to Square Payroll. This is correct, at this time we only support one EIN per Square Payroll account so you would have to set up two separate Square accounts. We’re working on expanding multi-location functionality and plan to start the foundational work to support multiple EINs under one Square Payroll account in 2022! 

[classicfun]

We have three locations in Square, but only one is able to do payroll through Square, because you don't allow for multiple locations/entities on the payroll side. Will this be fixed anytime soon?

[swo]

Hi @classicfun, yes! This is on our radar and something we’ll begin digging into in the second half of 2022. We hope to complete some of the foundational work next year so that we can support multiple EINs under one Square Payroll account in 2023.