Key takeaways
In this article...
Top methods for paying employees
There are four primary payment options when it’s time to run payroll:
- Direct deposit
- Cash
- Check
- Payroll cards
Direct deposit
Direct deposit is the most common wage payment method in the U.S., especially for salaried employees. In fact, more than 93% of employees earn their pay this way, according to the Getting Paid in America survey. Because direct deposit is so popular, most payroll platforms include direct deposit features.
Cash
Cash payroll is less common today than it was in the past, and it is often associated with paying workers without a paper trail. However, it is legal to pay workers a salary in cash if you follow the proper employment laws.
Check
Printed checks were the most common payroll method before digital banking gave rise to direct deposit. Although some financial experts disagree about whether paper checks will become totally obsolete in the near future, it’s a reliable payroll method that balances flexibility and efficiency.
Payroll cards
Also known as paycards, payroll cards are prepaid cards that are directly managed by your payroll software provider. Some payroll providers also use payroll cards to enable on-demand payroll, meaning employees can access their earned wages at any time.
Understanding payroll compliance and payment laws
Before choosing a payroll method, review your state laws and relevant federal laws such as the Fair Labor Standards Act. Many states have paycard laws that dictate how the cards can work, for example, and employers can’t make direct deposit mandatory for their employees in every state. It’s best to take time to review the laws to prevent any mistakes and penalties.
Most payroll software applications were built in compliance with state and federal laws, so the right software can give you peace of mind when it comes to paying your employees. Whether you need to track hours worked and holiday pay for an hourly employee, log paid time off and employee benefits for a salaried employee, or pay international employees in their local currency, there’s a payroll app that can help.
Check out our Payroll Software Guide to find the right solution for your business, or explore our other payroll resources:
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