An employer normally arranges for its employees to receive a paycheck via a payroll card instead of directly deposit into the employee's bank account. The employer may specify the type of card, for example, debit or credit cards. The payroll card contains detailed information of all deductions and payslip amounts, including the employee's net income for that pay period. Hence, a payroll card also enables the employer to calculate deductions accurately, read this article for more insights.
One important reason why an employer should switch to direct deposit now is because it saves money. Direct deposit allows the employer to avoid a lot of overhead charges. One option would be for the employer to deposit the paycheck into his bank account himself; however, he has to do this every pay period. Another option is to hold the funds in a savings account. This option is not feasible if the employer does not have an internet connection. Moreover, if the employer uses a bank card, then he must charge an administration fee every month.
Many small businesses are finding out that it is not convenient to keep large quantities of checks at home. A big inconvenience is waiting for the checks to clear after payday. If you are an employer who provides paycheck stubs, then you may charge your customers for this service. In addition, if you deposit the paycheck into your bank account, you will incur a service fee. Thus, if you switch to direct deposit, then you will not have these extra costs.
With direct deposit, you can easily replace checks. It costs less for the bank to replace a check than for you to purchase a check from the bank. Another advantage is that you will have immediate access to your funds. If you have been using a payroll card for years, then you may notice that the account balance gradually reduces. For this reason, many people have been tempted to close their account.
Some employers have successfully replaced their payroll cards with ATM cards. This is especially useful for those who live in rural areas and who cannot travel to the nearest ATM. With ATM cards, you can deposit your paycheck and withdraw it as soon as you get it.
Switching to direct deposit has many advantages as it has eliminated the cumbersome paperwork, made payroll simpler and easier, and it has reduced bank fees, to get more knowledgeable about this topic it is wise you take a look here.