how to make transparent area of logo

I have a self designed logo that looks great on a white background.  Problem is when I put the logo over a picture the outside area of the "o" in natco shows behond the red square.  I want the outside of the "o" to be flush with the red square so it looks good when I put it over a picture.   Any help on best way to do this??Image may be NSFW.
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