Square transfers money to your bank account through a process called a payout, which happens on a schedule you set or on demand depending on your account type.
When you receive payments through Square—whether from in-person card readers, online invoices, or the Square app—that money lands in your Square account first. To get it into your actual bank account, you initiate a transfer. Square calls this a payout. The money doesn't stay in Square; it moves to the bank account you've linked during setup.
How fast this happens depends on whether you use when ready payouts (available to most sellers for a small fee) or standard payouts (scheduled transfers, usually daily or weekly, with no extra charge). The bank account you're transferring to must be in your name and registered in the same country as your Square account.
Key Takeaways
- Square moves money to your linked bank account through payouts, which can be scheduled (daily or weekly) or when ready (same-day, with a fee).
- You must link a bank account during Square setup, and it must be in your name and match your account country.
- Standard payouts are free and arrive within one to two business days; when ready payouts cost a percentage of the transfer and arrive the same day.
- You can change your payout schedule or bank account anytime from the Square Dashboard under Settings.
- If a transfer fails, Square will notify you and hold the funds; you'll need to update your bank details or contact your bank to resolve the issue.
Setting up your linked bank account
Before any money can leave Square, you need to tell Square which bank account to send it to. This happens during your initial account setup, but you can change it later. Go to the Square Dashboard, click Settings, then Bank Accounts. From there, you can add a new account or edit an existing one.
Square will ask for your routing number and account number. You can find these on the bottom left of a check, or by logging into your bank's website or calling the bank directly. The account must be a checking or savings account in your name. Square cannot send payouts to accounts owned by someone else, even if you have permission to use them.
After you enter the information, Square will verify the account by depositing two small amounts (usually under $1 each) into your bank account within one to two business days. You'll then log back into the Dashboard and confirm those amounts to prove you control the account. This verification step protects both you and Square from fraud.
Choosing between standard and when ready payouts
Standard payouts are free and happen on a schedule you choose. Most sellers receive payouts daily, but you can set them to weekly or twice weekly depending on your business needs. The money arrives in your bank account one to two business days after Square sends it. If you choose daily payouts, Square typically sends the transfer at the end of each business day.
when ready payouts let you move money the same day you request it, but Square charges a percentage of the amount you transfer—usually between 0.5% and 2%, depending on your account type and location. For example, transferring $100 when ready might cost $0.50 to $2.00. when ready payouts are useful if you need cash quickly, but they add up if you use them frequently.
You can use both. Some sellers keep standard payouts as their default but use when ready payouts occasionally when they need money faster. To request an when ready payout, open the Dashboard, go to Payouts, and select Transfer Now or when ready Payout. The money should appear in your bank account within a few hours, though some banks take longer to process incoming transfers.
Changing your payout schedule
Your payout schedule is not locked in. You can change it anytime from the Dashboard. Click Settings, then Payouts, and you'll see your current schedule. From there, you can switch between daily, twice weekly, or weekly payouts. Changes usually take effect within one business day.
If you're waiting for a payout and need to know when it's coming, the Dashboard shows your next scheduled payout date under Payouts. You can also see a history of all past payouts, including the date sent, the amount, and the status (completed, pending, or failed). This history is useful if you need to track when money left Square for your records or taxes.
What happens if a payout fails
Occasionally a transfer will fail. This usually happens because the bank account information is wrong, the account has been closed, or your bank rejected the transfer for a security reason. When this happens, Square holds the funds in your account and sends you a notification—usually by email—explaining why the transfer didn't go through.
To fix a failed payout, log into the Dashboard and check the Payouts section for details about what went wrong. Common fixes include updating your bank account number if it changed, contacting your bank to ask why they rejected the transfer, or checking that your account is still active. Once you've fixed the problem, Square will usually retry the transfer automatically within a few business days, or you can request an when ready payout to move the money when ready.
If your bank rejected the transfer because of fraud concerns, call your bank directly and tell them you authorized the transfer from Square. Banks sometimes block transfers to new accounts as a security measure. After you confirm it with your bank, the next payout should go through without issue.
Tracking payouts and understanding fees
Every payout appears in your Dashboard with a timestamp, the amount, and the status. You can read a report of all payouts for a date range, which is helpful for accounting or tax purposes. Square also sends you an email receipt each time a payout is sent, so you have a record outside the Dashboard as well.
Standard payouts have no fee. when ready payouts charge a percentage, which varies. Some account types or regions have lower when ready payout fees than others. Before you request an when ready payout, the Dashboard will show you exactly how much the fee will be, so you won't be surprised. The fee is deducted from the amount you transfer—if you request an when ready payout of $100 with a 1% fee, you'll receive $99 in your bank account.
If you process a lot of transactions and use when ready payouts frequently, the fees can add up. Many sellers find that switching to a more frequent standard payout schedule (like daily instead of weekly) solves the problem without paying extra fees.
Frequently Asked Questions
How long does it take for money to show up in my bank account after Square sends a payout?
Standard payouts usually arrive within one to two business days after Square sends them. when ready payouts arrive within a few hours, though some banks take longer to process incoming transfers. Weekends and bank holidays can add time. If it's been more than three business days, contact your bank to confirm they received the transfer.
Can I transfer money to a bank account that's not in my name?
No. Square requires the bank account to be in your name and to match your account country. If you need to move money to someone else's account, you'll have to withdraw it to your own account first, then transfer it separately through your bank.
What if I want to change my bank account?
Go to the Dashboard, click Settings, then Bank Accounts. You can add a new account and set it as your default for future payouts. Square will verify the new account with two small deposits before payouts start going there. Your old account will stop receiving payouts once you switch.
Do I pay taxes on payouts from Square?
Payouts are not income—they're money you already earned. You pay taxes on the sales themselves, not on the payout. Square reports your sales volume to the IRS on a Form 1099-K if you meet the reporting threshold. Keep records of your payouts for your own accounting, but the payout itself is not a taxable event.
Can I pause payouts temporarily?
You can't pause payouts entirely, but you can change your schedule to less frequent (like weekly instead of daily) to let money accumulate in your Square account longer. If you need to stop payouts for a specific reason, contact Square support to discuss your situation.