An employer takes money out of its company’s budget using a payroll card instead of cash or a check. The payroll card is then used to make payroll payments for its employees. Often times, the payroll is sent electronically and is made available for employees online too. Instead of cash, checks are replaced with payroll cards. However, cash or checks may be processed on the day of payment if the payroll is electronically submitted or paper checks can be processed if the payroll is submitted manually. In addition, payroll cards are a great way for an employee to control their own spending habits and help the company save money by reducing fraud.
Every employer has a legal responsibility to pay its employee’s wages. In most cases, an employer has several options for paying these wages, but one of the most popular is to pay them with a payroll card instead of cash or a check. This saves time, reduces risk, and increases compliance among employers all around the world. There are some major benefits that employers find when they switch to direct deposit:
PayActiv payroll card is a method of electronically depositing a paycheck into an employee’s bank account on the afternoon that is designated as their final pay day. The employer obtains permission from the employees’ bank to debit the account on the designated pay day, then gives an employee cash or a check for that amount from the bank’s bank. An employer usually arranges for this payment through a financial institution or another bank. Often times, the employee will make their payment directly through the bank, or by check, and the employer pays the bank immediately.
Because debit cards are considered part of an employee’s financial institution account, the payroll card is treated just like a checking account and thus is accessible by the employee only when they ask for it. Most banks offer direct deposit to employees and most employers have no problem providing it. The bank does not charge an employee for this service. Make sure to check out this website at http://www.encyclopedia.com/finance/finance-and-accounting-magazines/personal-financial-planning for more details about finance.
Another option for employers is to maintain a traditional checking account along with payroll cards. Under this arrangement, the bank provides payroll deductions for the benefit of both the employer and employee. The bank issues a routing number to each account and uses it for both. Savings accounts typically have a different routing number but can be linked to an existing checking account. A payroll card is issued for use with either option.
The advantage of PayActiv debit cards over traditional banking options is that they are easy to replaced. If the card is lost, stolen or destroyed, the company must replace it at no additional cost to the business. Also, if the card fails to properly fund, the company is not responsible for paying a refund, and employees are not typically charged fees for this. With all of these fees, it is easy to see why payroll cards are gaining in popularity.