An employer usually arrangements with a payroll processing bank or such other financial institution to electronically pay its employees with an electronic payroll card. The employee’s paycheck is deposited directly onto the payroll card instead of directly credited or paid via paper check. Once the payroll has been deposited, the payroll card is used to make all of the employee’s payments. In this way, payroll cards can greatly simplify the administrative tasks that otherwise would have to be done manually, thereby saving time and money. Read this article to the end to learn more about the benefits of payroll debit cards.
To operate a payroll card, an employer does not need to do anything other than provide valid identification – either with his/her driver’s license or with an alternative form of photo ID, such as a passport – and program instructions to the financial institution that issues the card. When an employee submits the necessary documents to verify his or her income and bank accounts, the payroll card is immediately credited with the appropriate amounts. From there, the bank deducts the appropriate taxes from the employee’s paycheck. The debit amount from the bank is kept by the employer until the money is available to be withdrawn from the account.
Many people mistakenly believe that payroll cards allow employees to buy anything they want while working at their jobs. This is not true. Rather, payroll cards allow employers to give employees their own checkbook to use to make their own checks (with a separate bank account), as well as buy any cash that may be needed. In fact, some payroll cards allow employees to make electronic transactions with their checkbooks, allowing them to deposit checkbooks electronically and make instant withdrawals of cash when they’re short of funds.
While many of these cards are provided at no charge by the PayActiv, some cards require a fee. Some of the more common fees are service charges, which are due when employees make a transaction, and transaction fees, which apply to all cash withdrawals and purchases. Some banks also charge service fees for payroll cards. Additionally, there are some ATM fees if the payroll card is used to withdraw cash from an ATM. Finally, some employers may require users to maintain an account with the company, which may also have fees associated with it.
Not all companies offer payroll cards, so it’s important to shop around to find the one that’s right for your company. Most major financial institutions offer payroll cards, as do a number of smaller banks. Check with your employer to see if they offer the best payment method for you.
When using payroll debit cards, employees can print out their checks themselves. They will need a computer and printer for this function, as well as access to their bank account. This option eliminates the need for employees to carry around extra cash or checkbook to pay their bills, which can be time-consuming. Instead, employees can simply access their account on the day of payment and make their payments right then and there. It’s a much more convenient way to pay bills, and employees are happier with the process overall. You can get more enlightened on this topic by reading here: https://en.wikipedia.org/wiki/Credit_card.