• Home
  • Blog
    • Resources
    • Business Partner Magazine Archive
  • About Us
    • Cookie Policy
    • Disclosure Policy
    • Privacy Policy
    • Terms of Website Use
  • Contacts

Business Partner Magazine

Tips and advice for entrepreneurs, start-ups and SMEs

  • Business Success
  • Marketing
  • Finance
  • Employees
  • Technology
  • Start-up
  • Productivity
  • Communication

Acceptable Forms of Payment for Payroll

May 17, 2021 by BPM Team

Click here to get this post in PDF

Too long to read? Enter your email to download this post as a PDF. We will also send you our best business tips every 2 weeks in our newsletter. You can unsubscribe anytime.

Enter your NameEnter your Email Address
Accountant using the black calculator

Each acceptable form of payment has its pros and cons. An employer can decide which is best for his organization. However, their country of operation also plays a role. This is because every country recognizes some forms over others. Also, some factors influence how an employer pays his workers. As a new boss, you might have asked: what are the acceptable forms of payment for payroll?

This could be quite challenging because you are just starting out. Here, we’ll help you figure out the acceptable forms of payment for your workers. Also, you will learn how each type of payroll works. Please continue reading to learn more.

What are the Acceptable Forms of Payment for Payroll?

As an employer, you must understand the payment method that works. Before disbursing salaries or wages, find out the best payment plan for your business. It should favor your workers. Financial aid has become digital because the technology world is advancing. This is why payments have become easier compared to past years. Let us consider the acceptable ways you can pay your employees.

Paycheck

This is one of the most common and oldest means of payment. All you need to do as the employer is to write a check. You can print these checks too. Payroll checks don’t mean your employees must have a bank account. They can receive their salaries via some cashing services for paychecks. This mostly comes with a fee. 

As earlier stated, each payment method has its merits and demerits. However, this may pose a challenge. This is because the bearer may misplace the paycheck or someone may steal it. Also, some employees want their financial privacy when receiving money.

Writing your employees’ paychecks may be time-consuming. This holds if you have a large staff. Printing the paychecks can be a better and faster option. The challenge with printing is that the printer may develop a fault. Sometimes, the ink may dry out. 

One advantage of paying in checks is that you don’t have to keep bulky cash. Also, it gives room for documentation for future reference. Please note that checks must be available on demand. This means that employee’s paychecks must be available on payday.

Direct Deposit

This is another widely accepted means of payment for your workers. Within the United States, not less than 82% of employees receive payment via this method.

One reason why both employers and employees prefer this method is its convenience. It is stress-free as employers don’t need physical interaction with their workers. With direct deposit, you can pay your employees anywhere and anytime. All you need is your worker’s banking details.

Also, consider the timing for processing your employees’ salaries. Without this, there will be a delay for your workers in receiving their salaries. It may incur some charges. Some include set up, transaction, and monthly charges, as well as payday fees. These charges depend on the financial institutions involved. The regulations stipulated by federal tax laws also play a role. With this method, your employees can receive their salaries using the ATM.

Payroll Debit Card

The payroll debit card is a type of prepaid card which employers use in paying worker’s salaries. These cards could be Visa or MasterCard. With this method, employees can easily use the ATM.

When the payday comes, you pay your worker’s salary into the card. Once done, your employees can withdraw from retail outlets or the bank. With this method, your workers don’t need any banking details to receive their salaries. This debit card system saves time and is less stressful

One disadvantage here is that not all states accept payroll cards. For instance, in Texas, you can pay your employees with this method if they consent to it via writing. Therefore, inquire if your state permits you to pay employees using this method. Another con here is the fees involved. This method benefits the employees more. Sometimes, they may pay some withdrawal charges. Other times, the employer may have to pay these charges.

Cash

This means of payment comes with a lot of caution. Most employers use this method to pay their workers. However, with cash, there is no form of paper trail. Except you decide to generate one which can provide paper documentation of payment. With cash, your employees may have to sign on their payday after receiving their salaries.

It is difficult to keep records of payrolls with this method. If you are not careful, an argument can ensue between you and your employees. With cash, you cannot have solid bank records of payment.

The advantage here is that there is no fee or charge. It may only take time when it comes to auditing your IRS account for payment. This payment form is primarily for temporary labor workers and odd-job workers.

Mobile Wallet

This is fast becoming an acceptable form of payment for payroll. This method came to be from advancements in technology. It is a form of online payment that involves mobile wallets like Apple Pay, Venmo, etc. 

All you need to do is make deposits into your worker’s phone electronic accounts.  With this method, you can pay anywhere. However, it includes some charges. The employees may pay some during withdrawals. Fortunately, the fees are small or non-existent if you are paying with a bank account.

Laws

As an employer, always find out about laws governing the payment of payrolls. Not all states operate the same way in this regard. Also, you must stick to tax laws when paying in cash. Else the IRS may doubt that you are deducting the right amount of tax. 

When paying your employees, there may be a need for a pay stub. This discloses how you pay them and helps clear any form of doubt. It shows the deductions, net pay, taxes, and gross pay.

Conclusion

By now, you should understand the acceptable forms of payment for payroll. As an employer, consider these payment methods properly before choosing one. They don’t work the same way. Therefore, go for what best suits you and your employees. You may decide to hand them cash or pay into their accounts. Also, you can use two methods to pay your workers. With a detailed plan, you should have a stress-free time when paying salaries or wages.

You may also like: Paycheck Perfection: What to Include on a Payment Stub?

Image source: Pexels.com

Filed Under: Finance Tagged With: Financial advice, payment, Payroll, wages

  • Facebook
  • Instagram
  • Pinterest
  • Twitter
  • YouTube

Disclosure

We earn commissions if you shop through the links on this page.

Recent Posts

  • 7 Reasons Transparency Is Key for Small Businesses
  • How To Increase The Efficiency Of Your Small Business?
  • Seastock24.com Review: 4 things to check before putting your money
  • What’s in Store for Field Service Management Software in 2023
  • FCFmarkets.com Review: Should You Rely on This Broker for Daily Trading Activities?

Categories

Archives

Digital Marketing Agency

ReachMore Banner

Tags

Accounting apps bitcoin brand business growth business skills business success communication cryptocurrency Customer Service Data design ecommerce Efficiency employees Featured Article finance finances Health and Safety infographic insurance Investing investment legal legal services legal tips Management Marketing marketing strategy Outsourcing productivity property Real estate sales security SEO Social Media software starting a business startup Technology Trading Training website workplace

Disclosure

We earn commissions if you shop through the links on this page.

Digital Marketing Agency

ReachMore Banner

Business Partner Magazine

Business Partner Magazine provides business tips for small business owners (SME). We are your business partner helping you on your road to business success.

Have a look around the site to discover a wealth of business-focused content.

Here’s to your business success!

Copyright © 2023 - Business Partner Magazine·