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If a client has a website on squarepsace and they want to have a WordPress site does the client have to setup a new hosting server which then gives them access to WordPress and have the domain transferred and then they add me in or should I be setting this up for them?
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You can do it any way you like. Personally I do everything, because I’ve never met a client who knows how to set up hosting. To be clear, you don’t want to be using [Wordpress.com](https://Wordpress.com) for this.
Get proper WordPress hosting elsewhere, setup the account, move the domain, build the site, and send an invoice to your client.