An employer pays its employees using a payroll card. This type of card is often called an EIN, which stands for an Employer Identification Number. Your employer must provide you with at least one option, though not necessarily the best, to replace a payroll card with another. For instance, your employer may offer you a choice between a debit card or a payroll card, or even both.
If your employer does not give you another choice, most likely your only choice will be to use a paper payroll card issued by your employer. The problem with this is that you are forced to use your employer's financial institution, which will deduct money from your bank account each pay period. If you have a debit card, which is like a credit card without the benefits (in the eyes of your employer) of being paid automatically, then you will most likely be deducted from your bank account every time you make a withdrawal.
You may also find that when you go to the bank to pick up your checks, you will be charged a fee. Your bank may charge you either a fee per check, a flat rate fee for the number of checks you need to pick up, or even both. Also, if you use more than one payroll card, you will likely be charged more fees. Things like direct deposit may charge more, because you are considered a higher risk than your employees. Your bank is trying to protect its bottom line, so it adds these fees to each check you get.
Another problem with many payroll cards is that they contain expiration dates. When an employee fails to show up with the correct card, the payroll cards are held by the bank until the next period. Most employees do not show up on time, so the bank needs to issue a new card to that person with a late fee. This can add up to hundreds or thousands of dollars, especially if there are several employees with the same payroll cards. This is a big inconvenience for the employee and for the employer, since most companies have more than one payroll card, usually for different purposes. It is much easier to just issue everyone one payroll card for one purpose.
Many employers who offer payroll cards also offer other services, aside from issuing paychecks electronically. Some employers offer their employees the option of using a Paychex electronic transfer service, which can cut down on paper costs. The money is deducted from your check at that time, so there are no amounts printing on your accounting sheets for the amount due, and there are no checks printed that have to be printed.
Payroll service may be an excellent way to keep employees in check and organized, but there are some definite payroll card pros and cons. If you are going to use a payroll service, it is a good idea to weigh the pros and cons before you make your decision. You may find that there aren't any cons that will stop you from providing this service, but there may be some that will help you save money and simplify things for your company. Keep in mind that all companies handle money differently, and this makes it important for you to understand your company's process and the system that they have in place, click here to discover more details now.
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