Direct Deposit Is Flexible Direct deposit isn’t just for paychecks. Payroll security is both a pro and a con when it comes to direct deposit. The process requires an employer to put employees’ pay into their bank accounts by payday. If an employee loses a paycheck, your business could be in danger. Here are some pros and cons to using direct deposit to pay your employees. © 2021 Zions Bancorporation, N.A. Payroll must be submitted early. Hosted by Nevada State Bank, we're a one-stop digital resource center for business owners, executives and entrepreneurs. There are pros and cons of direct deposit for employers as well as employees. The employer simply loads the payroll card with the employee’s salary and a receipt is issued automatically. ... Paylocity manages all of the direct deposit, payroll deductions, payments to tax agencies, insurance companies and garnishments, ... Cons. Paying employees via direct deposit is safe and secure. And, you need to have direct deposit set up for your business. Employees can use paycards without a credit check or any bank account requirements. While employee preference may also be viewed as a negative, there is something to be said for keeping employees happy, and chances are, most employees will prefer having the option to have their check deposited directly into their bank account. 2. We help Nevada’s small businesses succeed. Convenient Direct deposit gives you convenience unmatched by physically handing employees their wages. Direct deposit does come with a fee, although you're paying for a valuable service that has many advantages (see below). It is important for employees to know the differences between the two as well as their pros and cons so that they are able to make a calculated choice between paper checks and direct payments. Direct deposit, like most online innovations, has a lot to offer. Now, there are several upsides and downsides to each of these two methods of payments. Pros of Direct Deposit Direct deposit is safe, so you don't have to worry about stolen, damaged or lost checks. You might have some employees who do not have a bank account. No more wasting time writing or printing paychecks. Increased Errors. Employees get to use their payroll card immediately when funds are issued to it. Direct deposit is one popular choice for both employees and employers. For instance, workers can split their paychecks across checking accounts, savings accounts, and retirement funds. Pro: You carry on with your head held high and professional integrity in-tact. Collect the following information from each employee participating in direct deposit: Do you have some employees who want to be paid via direct deposit and some who want paper checks? Is Direct Deposit Safe? It literally cuts your payroll prep time in half, leaving more time for HR or payroll staff to focus on other tasks. Here is some information and advice on the pros and cons of direct deposit: Pros. One lost check ending up in the wrong hands can be detrimental to your business’s funds. While many businesses and employees find it to be a convenient way to handle paychecks, there are several factors worth taking into consideration. With the current interest rate of 8.65%, investing in PF is a smarter choice when compared to Fixed Deposits (7.5%), Recurring Deposits (7.5%) and PPF (8.1%). And, our full service payroll will file and remit payroll taxes, so you can focus on revenue generating activities. Pros of direct deposit 1. Direct deposit is a convenient way for you to avoid extra errands. Clicking any of the links to 3rd party sites will direct you to a website that is not affiliated with Nevada State Bank or Zions Bancorporation and may have a different privacy policy and level of security. Your business’s name and address, as well as your signature, are on checks. These paper costs are reduced as checks and envelopes are no longer required.Direct deposit also saves money by: 1. Fees are considered a mandatory part of the payroll process, but cards help modern-day companies reduce these fees, if not eliminate them entirely. Some employees prefer to receive physical wages, e.g., a paper check, as opposed to having them directly deposited into their account. This may help you in the long run. Employees might have different preferences. 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