Hello @jcwarden4 when you say you set yourself up as an employee...are you using Square Payroll? or do you mean in your accounting system/software you're considering yourself an employee?
In my own case as a sole proprietor, I just take money out of my bank account and mark it in Quickbooks as an "owner's draw". You can do this on a routine schedule and amount, or you can just take money out of your business account to pay yourself whenever you want, and how much you want. And yes, this needs reported and is considered "income" and may be taxable (please consult a tax advisor/professional as I am not an expert in this field).
