Find out how to Pay Workers | Selecting the Sort of Cost

How do you pay your staff? With checks? Direct deposit? Different? There are a number of methods to pay staff, particularly as cash continues to maneuver into the digital sphere. If you wish to know learn how to pay staff, check out these methods to pay your staff.

And boy, do you will have choices. You possibly can reduce staff a verify, deposit cash instantly into an account, or hand them an envelope crammed with money. 

So, which choices are the most effective ones for what you are promoting? Learn on to match the methods you possibly can pay your staff. 

Find out how to pay staff 

Realizing which worker fee methodology to make use of is simply a part of the enjoyable. Earlier than you get to the distributing wages step of the payroll course of, it’s good to calculate staff’ gross wages and withhold taxes and different deductions. 

Nevertheless, this text received’t get into the nitty-gritty particulars of the payroll course of. As an alternative, it’ll concentrate on learn how to pay staff and the other ways to pay staff, together with verify, direct deposit, pay playing cards, money, and cell pockets. 

list of the five types of payment methods with visual icons

Learn how to pay your staff by trying on the various kinds of strategies and seeing which one makes essentially the most sense for what you are promoting. Take note of prices and your employer duties, too. 


Paying staff with paychecks is among the hottest fee strategies. You might take into account paying your staff by both writing or printing payroll checks

In contrast to fee strategies involving digital funds transfers (e.g., direct deposit), staff don’t must have financial institution accounts to obtain their wages through verify. As an alternative, staff can use a check-cashing service (for a charge) to obtain their wages. 

Earlier than deciding to supply this fee methodology, take into account the professionals and cons of paying your staff with a paycheck. For instance, some staff might favor the privateness of receiving paychecks as a result of they don’t must share banking info. However, paychecks can get misplaced or stolen.  

Time and price of utilizing paychecks 

Handwriting a paycheck may be time-consuming for employers. Writing out worker checks every pay interval takes time, particularly when you have a variety of staff. 

For those who resolve to print your staff’ paychecks, it can save you appreciable time from writing all of them out. But when one thing goes improper together with your printer (or when you run out of ink), you could have to resort to handwriting checks. 

Plan to spend cash on clean checks when you handwrite checks. And when you print paychecks, you want verify inventory, ink, and a printer. You may even want a particular MICR printer with magnetic ink. 

Direct deposit

Direct deposit is the most typical solution to pay your staff, with over 93% utilizing it. One of many largest advantages of direct deposit is comfort. 

With direct deposit, there’s no must bodily hand an worker their wages. So, when you or an worker is on trip, direct deposit recipients will nonetheless obtain their wages on time. 

When you obtain an worker’s banking info, you possibly can instantly deposit their wages every pay interval by means of an digital funds switch (EFT). 

Earlier than deciding to make use of this solution to pay your staff, perceive the timeframe for processing direct deposit. If you don’t run payroll by a sure day, your staff received’t obtain their wages when anticipated until you expedite the method or use one other fee methodology.  

Time and price of direct deposit 

Direct deposit is a comparatively fast course of, until you miss your timeframe for processing. Usually, essentially the most time-consuming half is establishing direct deposit

Needless to say direct deposit might include some charges it’s good to learn about. You might must pay set-up charges, month-to-month charges, and a small charge per pay interval. Set-up charges might vary from $50-$149, and transaction charges is likely to be $1.50 per transaction

Nevertheless, you will not be liable for footing the direct deposit invoice. Search for a payroll software program supplier that provides free direct deposit (like Patriot Software program!).

Payroll playing cards

A pay card (or payroll card) is a pay as you go card that employers can use to pay staff. Every payday, the cardboard is loaded with the worker’s wages for that pay interval. 

Workers can use the pay card like a debit card, or they will withdraw wages by means of an ATM or financial institution cashier. In contrast to direct deposit, staff don’t want a checking account to obtain their wages. 

Time and price of pay playing cards 

Though utilizing pay playing cards can prevent time, there are a number of charges related to this methodology. 

Along with set-up prices, staff might incur charges. Relying in your state, you could be required to pay these charges to your staff. 


Paying staff money is one other manner you possibly can pay your staff. However when you resolve to pay staff in money, you have to be further cautious with regards to maintaining information. 

Money funds to staff may make the IRS suspicious that you just aren’t taking out the proper tax quantities.

Paying staff in money makes it tougher so that you can preserve observe of payroll information. In contrast to different fee strategies, there isn’t an computerized audit path (e.g., financial institution information) while you pay in money. 

Time and price of paying money 

Paying staff in money doesn’t require speedy charges like with direct deposit, payroll playing cards, and paychecks. 

However, paying in money places you at the next threat for an IRS audit, which prices vital money and time. 

Cell pockets

One other fee choice growing in reputation is using cell wallets (e.g., Venmo or Apple Pay). 

Cell wallets for payroll require you to deposit worker wages into their cellphone’s digital accounts. Workers with cell wallets can use the funds of their accounts to instantly make purchases. 

Time and price of cell wallets

Depositing cash into an worker’s cell pockets is a comparatively streamlined course of for each staff and employers. 

However earlier than selecting cell wallets as a solution to pay your staff, take into consideration the related charges. Fortuitously, the charges for person-to-person transfers are both nonexistent or small when paying with a checking account. 

Nevertheless, staff might must pay a charge when withdrawing cash from their cell pockets.  

Offering a pay stub 

Relying on what you are promoting location, you could be required to offer a pay stub to your staff—no matter their fee methodology. Take note of pay stub necessities by state to remain compliant. 

So, what’s a pay stub? Pay stubs present staff their gross pay, deductions, and internet pay. Consider a pay stub like a receipt that exhibits staff you’ve paid them. 

Payroll recordkeeping 

Whatever the fee strategies for workers, it’s good to preserve correct information for at the very least three years

Element info just like the date, quantity, and pay interval for all staff. And, report gross wages, deductions, and internet pay. 

Find out how to pay your staff: What to not do

Can an employer require direct deposit, pay playing cards, money, paychecks, or cell wallets? 

Most states have legal guidelines that regulate when you may make sure forms of fee necessary, like direct deposit and pay playing cards. Usually, you will want to supply multiple fee methodology to your staff.

For instance, you possibly can supply staff the choice to obtain their wages through direct deposit or by means of paper checks. That manner, staff with out financial institution accounts can obtain their wages.

When selecting learn how to pay staff, don’t violate state legal guidelines. Work together with your staff to make sure the fee methodology works for them.

Wish to study extra about fee choices?

Obtain our FREE information for the inside track.

Keep away from the hassles of managing payroll information, direct deposit charges, and incorrect payroll. Patriot’s payroll allows you to simply print checks or use free direct deposit, and all payroll calculations are 100% assured for accuracy. Strive it without cost right this moment!

This text has been up to date from its unique publication date of March 22, 2017. 

This isn’t supposed as authorized recommendation; for extra info, please click on right here.

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