This is a blog about REAL questions with REAL answers from REAL people for REAL business owners and professionals. How many times have you had questions about payroll or just business or tax questions in general, but couldn't figure out exactly what to ask or who to ask it to? I hope it's comforting to know you're not the only one this happens to! I felt the same way in the beginning, many years ago. It's actually what drove me to this profession in 1984! Now, after decades of helping thousands of people, just like you, I'm writing this blog to help YOU! So dig in - see if some of our questions and answers put words to your thoughts. We're here to help - so reach out to us with your every-day challenges and we'll create a post just for you!
What is the Best Method for Paying Employees?
As a small business owner, there are four different methods that you can choose from to offer to your employees. Make sure you look into each method so that you can choose the right fit for your business.
Written or Payroll Check
A Payroll Check is a check that is issued in payment of wages or salary for the work the employee has completed for your business. The employee can then either take the check to the bank or have it cashed at a cashing service. The costs to your business for written payroll checks include supplies for printing and time.
This is the most common method of paying employees. Direct Deposit is the electronic transfer of payment to your employees from your business account to their individual accounts. In this case, your employees will need to have bank accounts for their wages to be deposited into. This has no supply costs and is more time efficient than written payroll checks.
A paycard is an alternative method for employees to receive their wages. This method is great for employees who do not have bank accounts. Paycards work just like Direct Deposit, but instead of the wages being deposited into a bank account, the funds are deposited onto a card that can be used to as a debit card.
Cash is a very uncommon way to pay employees. When paying employees in cash, your business's record and book keeping must be very specific and very accurate. Paying cash to employees may trigger the IRS to look into your business to ensure that you are taking out the correct amount of taxes from each employee. The cost associated with paying employees cash is the risk of a costly IRS audit. As an employer you are still required to take out taxes and keep record of the payments.
At payroll vault, we give you our undivided attention and work with you one on one to determine what the best method of paying your employees will be. Contact us today to learn more about how Payroll Vault will be the best fit for your small business!
At Payroll Vault, we want to be an extension of your business team.
We're available, accessible and affordable. Reach out today.