Direct Deposit vs. a Payroll Card

When you’re a small business owner, there are many payroll decisions to consider. One of the most important decisions you’ll need to make is whether you should pay your employees by direct deposit or by a payroll card. By learning the benefits and drawbacks of both options, you can make an informed choice that will benefit both you and your employees in the long run.

Some companies believe that the payroll card offers significant advantages, while others argue that direct deposit is better. In this article, we’ll explore the benefits and downsides of each option to help you make a better-informed decision on which choice is right for your companies’ payroll. 

Direct Deposit 

What is direct deposit? Direct deposit, also known as DD for short, is the electronic transfer of funds which can include social security and retirement benefits, salaries, and tax refunds from your employer, a government agency, or another institution, such as a bank, to your personal or business account. Direct deposit is often the preferred method for employees to receive their pay because of the many benefits such as:

• secure 
• easy
• always on time 
• reduce the risk for stolen or lost checks 

 

Although this option is the most sought after for employees and employers, it can have a few potential drawbacks such as: 

• added cost for the business owner 
• need to fill out new forms when changes occur 
• potential for stolen identity and bank information  

 

Payroll Card 

There are situations where direct deposit might not be the best form of receiving payment. Payroll cards make it possible for those who do not have a bank account or local banks near them to receive a paycheck. Printing out checks can be expensive, and some banks even charge extra for direct deposits. On the other hand, payroll cards come with little to no cost to the employer, depending on the service they sign up for. Although these pre-loaded cards come with many benefits, there are also a few drawbacks such as: 

• additional fees for using the card 
• general fees for the employee 
• the card can easily be lost or stolen 

 

Direct Deposit vs. Payroll Card: Conclusion 

As a business owner, it’s essential to understand the ins and outs of your business’s payroll. This often means learning more about ways you can help your business and employees thrive. Not all companies might see the benefits of using one form of payment over the other. However, there is always a better option for your business. If you are an Ormond By The Sea business owner struggling with payroll, Vision HR is here to help. With a skilled team of experts, we are ready to help you make payroll an easier task. Contact us today to learn more about our services and speak with a payroll expert.