Over the program of National Payroll Week 2018, we’ve learned that workers really love being rewarded — even more than they love Christmas. For numerous employees, payday determines to pay off debt. We also know that funding employees the correct amount, on time, is significant to both their assurance and their dedication to your company.
But how your workers get paid can be simply as crucial as how much salary you give them.
And if you are still sending your workers home with a cheque each salary day, you might want to think for an updated system.
QuickBooks Payroll lately engaged an independent survey* to find out how workers prefer to be paid. Here is what they found.
Direct deposit is one favorite thing
Direct deposit isn’t only the most popular way for workers to get paid (72 percent say they are disbursed through direct deposit), it’s also the most common. The vast majority of workers (76 percent) like to be paid via direct deposit.
It isn’t difficult to understand why. Direct deposit determines that an employee’s paycheck comes automatically in their bank account on payday, and the costs for employers are minimal.
Paper cheques are an old-school idea
Paper cheques are a suitable payment mode for businesses, and for workers with a smartphone and a banking app, depositing a check can be as simple as snapping a photo. But only 12 percent of workers still prefer this old-school payment mode on payday.
Cheques can easily be misplaced or stolen, and, smartphone or not, depositing checks is still a hassle.
Cash isn’t king
Only 4 percent of workers say they are still remunerated in cash, but 9 percent say they would favor some money as their payment mode — and that number increases to 19 percent at businesses with fewer than 20 workers.
But rewarding employees in cash can introduce a host of tax and payroll complications that SMBs would be smart to avoid. If you choose to pay your workers in cash, accurate and persistent record keeping is a must.
Stop trying to make payroll cards happen
Less than 2 percent of employees would prefer to be paid via a payroll card — and this is true no matter what size the company.
A payroll card serves as an alternative to direct deposit or paper cheques. Workers can use their payroll card anywhere debit cards are accepted, and they can even withdraw cash from an ATM (with a fee, of course).
But for 1 in 5 workers, payday is paying off debt — and payroll cards make it hard to transfer money. Additionally, payroll cards are often followed by monthly maintenance fees, ATM fees, and overdraft fees that can quickly cut into an employee’s pay.
They are a good option for workers who don’t have their own account, but it’s the least favorite option for those who do. “Employees should always have the option of direct deposit into their own account,” says Lauren Saunders, leading attorney at the National Consumer Law Center. “It violates the law to require an employee to use a payroll card.”
Picking the right payment method for your company
In the end, you’ve got to pick the payment mode that makes the most sense for your company and your workers. Just don’t forget to examine your state laws on the matter to evade payroll penalties.