Square Payroll: "Simple Roth" Option for Employees Benefits

[achinback]

The title of this thread has been edited by a Square Moderator from the original: Does Square Payroll have the new Simple Roth Option available for the employee benefits?

This is a new retirement option the government is allowing as of 2025. I am trying to update my employee benefits through Square payroll (we were previously on a Simple IRA). Has anyone successfully figured out how to do this? When is Square Payroll going to have this Simple Roth IRA benefit option available?

[Donnie-M]

@achinback I am assuming that in the list in this link, one of those cover what you are looking for.

https://squareup.com/help/us/en/article/6244-add-existing-employee-benefits 

[Sammie_C]

Hi @achinback, thank you for your post.

The article that @Donnie-M mentions would be a good place to check to answer your question, as I can see there are a couple Roth options listed on there. I am not super familiar with this new type of Roth you mentioned, but could you confirm if it is listed in the article provided? If not, please let me know and I can look into this further.

[achinback]

I already looked at this list and it is not on there. It’s a Simple Roth IRA. So it’s a combo simple Ira and Roth IRA so the employee’s investment each paycheck would be taxed and go into a Roth account, while the matching contribution from our company is a Simple Ira and would not be taxed. There is no option for this but there definitely needs to be one set up. Once employees learn about this benefit/iRA option, it’s going to be very popular. Any help you can give would be great. Thanks!

[Donnie-M]

@achinback Ok, I understand what you are looking for now.  The naming is different depending on what you are doing.  It sounds like you're referring to a SIMPLE IRA with a Roth contribution option, which is now possible due to the SECURE 2.0 Act. Employees can contribute after-tax (Roth) dollars if the plan allows it, while employer matching contributions generally remain pre-tax unless the employer chooses otherwise.

While, it looks like you could set up a manual after tax deduction, and then the company match would be the simple ira portion, I am not sure how this would look for reporting.  I think this is the question for square payroll:

"We are looking to set up a SIMPLE IRA with a Roth contribution option for employees. Since Roth SIMPLE IRA contributions must be after-tax, we need to confirm whether Square Payroll supports this structure.

1. Can we set up an after-tax deduction for Roth SIMPLE IRA contributions?
2. Will Square Payroll properly reflect these deductions as taxable income on Form W-2?
3. Since employer matching contributions must remain pre-tax, will Square Payroll allow both a pre-tax employer match and an after-tax employee deduction under the same plan?
4. Does Square Payroll support any required Form 1099-R reporting for Roth employer contributions?

We want to ensure compliance with IRS regulations while offering this benefit through Square Payroll. Thanks!"

[Sammie_C]

This is so helpful, @Donnie-M! I sent over a message to our Payroll team and will see what they have to say. I will post their response as soon as I hear back. 😀

[Sammie_C · Accepted solution]

Thank you for your patience on this! Wanted to check back in after hearing from our Payroll team, @Donnie-M and @achinback. To answer your questions, the simple answer is that the Simple Roth IRA option is not available at this time, unfortunately. It is on our Payroll's team roadmap, but there is no timeline at this time.

Please let me know if you have any other questions in regard to this.