Did you know that over 627,000 new businesses are opening every year?
Learning about managing payroll, tracking employee pay, and staying compliant can be difficult when you’re starting out as a new business. There are so many things to remember and potential ways to make mistakes.
Are you trying to find out what the best way to pay your employees is? There are several options to choose from.
Keep reading below for 4 of the best options for employee payments.
1. Pay Cards
This is a more modern way to manage payroll in a business, but it’s becoming more common in certain states that have fewer regulations. With this method, you don’t need to obtain any of your employees’ bank account information or exchange anything in person.
A pay card is simply a prepaid debit card that you would deposit the employee paychecks onto each pay period. This software doesn’t cost much at all and all of the money is FDIC insured.
2. Direct Deposit
This is similar to the pay card method, but this method is much more common and preferred for employees that do have bank accounts. With direct deposit, the funds owed to the employee are deposited straight into their bank account through electronic payroll processing.
Generally, this is a service that is included without additional costs, so you can use this method with your regular payroll software. Due to its popularity, many banks are now also offering full payroll services to employers to make the process easier.
Even with direct deposit, some employees still want to be able to see how much they’ve made and how many hours they’ve worked on paper. With an online pay stub maker, you can easily provide this information and direct deposit their funds at the same time.
3. Paper Checks
Paper checks are still a common way for employers to pay their employees that want to have a paper trail or don’t want to deal with bank accounts. You can print paper checks with your payroll software or write them out by hand. As you can guess, handwriting the checks is a little cheaper, but takes more time.
If you decide that you want to print your checks, you should ask your bank about positive pay solutions. This is a fraud prevention measure that banks might offer to match the information on the cashed checks to the checks that you have uploaded and authorized for payment.
4. Cash Money
If you only have a few employees and they are only working hourly or part-time, paying in cash might be a viable option. It can be riskier to pay your employees in cash if you’re worried about being audited by the IRS and are not creating an audit trail.
In addition to that, you have to figure out how to do payroll, maintain extremely detailed records, and create pay stubs for these employees and your business overall.
Manage Your Employee Payments Like a Pro
There are a lot of options for employee payments and some payment methods will work better for certain types of businesses. Pay attention to your business size and what your employees would prefer, but also what makes the most sense for your payroll budget.
Did you find this information helpful? If so, be sure to check out the rest of our website for more content like this to help your business succeed.