How to pay by task as well as hourly

[anchored]

We pay our staff hourly and run payroll every two weeks.  I have two different tasks that I pay a couple of employees that are paid a set amount and not based on an hourly rate.  These two tasks are completed every week so the payments are very consistent and reoccurring.  What are my options for paying for these two tasks via our normal payroll cycle?

[Summer2024 · Accepted solution]

Hi @anchored ! 

Great question here. 

You could pay these individuals as contractors versus hourly employees. 

To set up an employee as a contractor in Square, log in to your Square Dashboard, navigate to "Team Members," select the employee you want to change, go to "Payroll," then choose "Contractor" as their employment type. 

To then pay the employees for their work: 

1. Sign in to your Square Dashboard and select Staff & Payroll > Payroll > Run payroll.

2. Select Pay Contractors.

3. Select your Pay Period dates. If you choose a pay period in a previous year, the payment will be included in the current year’s Form 1099-NEC.

4. Choose your payment method: Use Default Payment Method or Pay All by Check. If you want to record a payment you already made or want to write checks for all contractors, choose Pay All by Check.

5. Select your contractor(s) and enter their pay or hours worked. 

6. If you are using Square Shifts timecards (or a supported third-party timecards application) and/or commission tracking, select Import time and wages to import your contractor’s hours and commissions for the pay period. Alternatively, you can manually enter commissions in the Amount column.

7. Select Continue.

8. Review the contractor payment details and select Submit Payment. Contractors paid by direct deposit will receive pay four business days after you send the payment.

I hope this helps!

[anchored]

@Summer2024

Thanks for the reply.  Do you know what this will do to their taxes?  It would seem like would get both a w2 as an employee as well as the 1099-NEC (Nonemployee compensation) as a nonemployee...but they are employees.   These jobs are just task based not hourly based.  I would like to keep them based on the task and take taxes out just as I would for them working several hours at their hourly wage. 

[Summer2024]

No problem! 😁

We are super limited on any kind of tax advice we can give. My best advice is to reach out to your accountant or a tax consultant as to what is the best way to do this. 

I would make sure you and the contractors are also on the same page about how taxes will be taken out as well.