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3 payment options that simplify payroll

Cutting a paper check is one method for paying employees, but it’s not the only one. Presented by Chase for Business.

minute read


    Paper checks or cash were once the primary ways to pay employees’ earnings. Employers today have a variety of options available to them to manage and simplify their business payrolls. The most common methods include checks, direct deposits and debit cards.

    Knowing how each of these works and how they benefit your business can help you decide which one is the best option.



    Considering all the benefits checks provide, replacing them with newer options is not as simple a decision as you might expect. If you have time to oversee your business checking account and ensure you have enough money to cover payments, issuing payroll with checks remains a reasonable choice.

    Benefits of paying by check

    • The process of writing and issuing checks can be automated, saving you time and expense.
    • Processing and distribution costs for physical checks are minimal. Paper checks can help employers avoid paying convenience fees.
    • A check lost by you or an employee can be canceled. It’s also a lot harder for someone who steals a check to cash it nowadays without identification.
    • Handwritten or printed checks provide a verifiable paper trail. It may take longer to write and document a check, but it gives you a quick and easy way to prove that a payment was made.


    Direct deposit

    In an increasingly cashless world, electronic funds transfer has become the preferred method of payroll.

    Here’s how it works: Employers establish an account with their financial institution. After payroll funds are deposited into the employer’s bank account, payments are scheduled to be electronically transferred directly into employee accounts. This is done using the bank’s software or, when compatible, your business payroll software, eliminating the need for a traditional check.

    Direct deposit laws vary from state to state. Make sure you understand your state laws and federal regulations if you decide to go this route.

    Although direct deposit is a low-cost way to process payments, there are electronic transfer fees involved and adding new employees to your payroll can lead to additional setup fees.

    Benefits of paying by direct deposit

    • Direct deposit help eliminate the possibility of payment being misplaced, lost or stolen being that there is no physical check or pay card. Also, direct deposit doesn’t contain the kind of identifying information found on checks, thereby reducing the possible fraudulent use of such information.
    • You might be able to make payroll payments from anywhere.
    • A check lost by you or an employee can be canceled. It’s also a lot harder for someone who steals a check to cash it nowadays without identification.


    Pre-paid debit cards

    Pre-paid cards, also called pay cards, are a relatively new option that lets employers pay employees with pre-loaded cards. Like a debit card, both physically and functionally, the card displays the brand of the financial institution that provided it (e.g., Visa, MasterCard, American Express and Discover). They can also be issued as unbranded cards linked to an ATM or POS network, like STAR or Pulse, making withdrawals more accessible.

    Federal laws prohibit employers from requiring employees to accept wages on a payroll card. You must offer at least one other option. Some states require written authorization from employees. Check with an accountant to verify the laws in your state.

    Benefits of paying by pre-paid debit cards

    • They’re faster and simpler: Each pay period, the employer automatically loads the cards with employees’ payroll payments. Take some time to learn more about the fees involved.
    • Pay cards give employers a way to simplify payroll payments to employees who don’t have bank accounts.

    Successfully manage your options

    As you weigh which method of business payroll to employ — checks, direct deposit or pre-paid debit cards — think about how processing and distributing payroll will be managed and who will manage it. Consider connecting with a Chase business banker to learn more about how each of these might integrate with the payroll system you are putting into place.


    For informational/educational purposes only: The views expressed in this article may differ from those of other employees and departments of JPMorgan Chase & Co. Views and strategies described may not be appropriate for everyone and are not intended as specific advice/recommendation for any individual. Information has been obtained from sources believed to be reliable, but JPMorgan Chase & Co. or its affiliates and/or subsidiaries do not warrant its completeness or accuracy. You should carefully consider your needs and objectives before making any decisions and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results.

    JPMorgan Chase Bank, N.A. Member FDIC. ©2023 JPMorgan Chase & Co.