COVID-19 has changed so many aspects of business operations – including how you pay employees. Even with government assistance providing payroll funds, it can still be tricky to figure out how to actually distribute paychecks to your employees. This becomes especially hard if they aren’t coming into the office. One of the many benefits of direct deposit is that you don’t have to physically hand your employees a check.
If employees are working from home, they don’t have to worry about risking their health by coming into the office to grab their check. If they’re pulling extra shifts and working overtime, they don’t have to worry about finding time to drop off the check at the bank. Direct deposit is beneficial for employees and employers alike.
What is Direct Deposit?
Direct deposit is the process of depositing your employees’ payroll dollars directly into their bank account. This completely eliminates the need for a paper check. To get started you simply need your employee to fill out a direct deposit form with their account information including their bank account number and routing number. One they provide this information, it’s easy for your payroll company to make the switch to direct deposit.
Benefits for Employers
There’s a lot of benefits of direct deposit for employers, including saving time and money. Once you have the process set up, you’ll wonder why you didn’t make the change sooner.
Save Money with Direct Deposit
Writing, printing, and mailing checks can quickly eat up dollars that could be spent on bonuses for your employees, new office supplies, or other business needs. With direct deposit, there’s no need for the paper printouts. The money will be deposited directly into your employees’ accounts.
Save Time on Payroll Tasks
Another benefit of direct deposit is that it saves human resources’ time when they process payroll. Now instead of creating and distributing checks, they can click a button and be done. Direct deposit is a simply a more efficient way to pay your staff.
Pay Employees On Time, Every Time
Direct deposit also helps ensure employees are paid on time, every time. You no longer have to worry about an employee who’s out sick not getting their paycheck or mailing the last check to an employee who recently left the team. Because the money shows up directly in their account, there’s no delay between when payroll is processed and when an employee receives their money.
Be More Environmentally Friendly
Eliminating the need for paper checks is also great for the environment. If you think that’s not an important business agenda, think again. A recent survey showed that half of all respondents and three-quarters of millennial workers said they would be willing to accept a smaller salary to work at a company that’s environmentally responsible.
Benefits for Employees
Employers aren’t the only ones who benefit. Many employees prefer to be paid via direct deposit as well. COVID-19 has only amplified the desire for direct deposit as people try to minimize their trips out in public. However, even during more normal times, a lot of employees still prefer to be paid this way for a variety of reasons.
Have Control Over Where Money Goes
Direct deposit allows employees to easily dictate where their money goes. Whether they want it sent to their checking or savings account, it’s easy to set it up. Direct deposit also gives employees the opportunity to split the money into multiple accounts.
For instance, let’s say that your employee wants to automatically put $200 into their savings each pay period and deposit the rest of their paycheck into their checking account. This is completely doable with direct deposit.
Save Time on Depositing
Employees can also save time with direct deposit when they don’t have to come into work to pick up a check or drive to the bank to deposit it. Even though many financial institutions offer the option to deposit checks with your smartphone, there’s a delay in funds with this method. Direct deposit is instant and eliminates any delay in an employee receiving their paycheck.
Avoid Lost or Stolen Checks
Direct deposit means that employees no longer have to worry about lost or stolen checks. This can cause a serious delay in payday and cause hardship on the employee. Avoiding this ends up being a benefit for employers also because they won’t need to go back to old pay periods in order to reissue checks.
Get Set Up for Direct Deposit
If choosing direct deposit seems like the right step for your business during COVID-19 and beyond, we can help you get started. In addition to assistance with basic payroll and tax solutions, we offer HR support and reporting options. These complete solutions can help you take care of your employees during these difficult times.