There are three basic paycheck options available to employers, direct deposit, paper checks, and pay cards. There are benefits to each type of payment, although which one fits a company best will depend on a variety of factors, including the number of employees and the size of the payroll staff.
Many companies still choose to use standard business checks with attached pay stubs. This method has the benefit of creating a clear record of each employee’s gross wages, state and federal taxes, and deductions for pensions or retirement plans. Pay stubs also typically include the number of hours worked and the amount actually paid to the employee after deductions. Many government agencies, landlords, and lenders require proof of income from potential tenants, clients, or employees. Because they contain all income information, pay stubs are a reliable way to track salary, taxes, and bonus information.
Direct deposit has become popular with many business owners who do not have the time or resources to write paper checks. With direct deposit, an employer can deposit a worker’s salary directly into his or her account. This has proved a safe and simple method of payment as it allows employees and employers to keep an electronic record of all transactions. Furthermore, employees do not have to go to the bank to cash the check and can access the funds immediately.
One increasingly popular method of issuing paychecks is through pay cards. Much like debit cards, the money earned by an employee is placed directly on the card, which can then be used to purchase items or withdraw money. Unlike direct deposit or paper checks, employees are not required to have a bank account to receive payment through a pay card.
Many large businesses choose to use direct deposit to pay employees in an effort to cut down on the expense that would be involved if the checks were printed, handwritten and mailed. Smaller businesses, on the other hand, may benefit from the clear record of salaries and deductions that pay stubs offer. To determine which paycheck option is best for you, please make an appointment with a member of the CORE financial team by calling 918-209-3441 to speak with someone at our Tulsa office, 405-288-1207 to reach our Oklahoma City office, or 580-353-2376 to contact a Lawton team member.