Payroll cards allow employees to access their wages and earnings without the need for direct deposit or manual deposit. They offer quick access to compensation and simplify payment disbursement for employers. However, fees may apply, and it’s important to ask direct questions before enrolling in a program.
Payroll cards are financial cards that allow you to access wages and other earnings issued to the cardholder by an employer. Using a payroll card service allows you to eliminate the need for a direct deposit into a checking account, as well as the need to manually deposit a paycheck into a bank account. With a payroll card, an employee can withdraw money from any ATM or use it in the same way as any debit card.
Employees find the card approach to payroll to have several advantages. First, most programs make pay and salary available the same day the employer issues the payments. This means there is no need to wait until the next business day to withdraw funds, as is often the case with a direct deposit into a bank account. This quick access to employer-issued compensation also means employees don’t have to rush to the bank to deposit a check before a specific time in the afternoon so that funds are deposited into a checking account the same day.
Employers can also benefit from using a payroll card service to pay their employees. The process requires no more steps than handling a direct deposit and often simplifies processes related to issuing receipts that detail payment disbursement for the period quoted. Employees can easily go online to view balances and also get a detailed report of net pay retention and distribution. This means less paperwork to generate for the employer.
While a payroll card has many benefits, it’s important to note that not all payroll programs work the same way. There are many different types of fees that may or may not apply depending on the program. For example, your payroll card setup might allow you to deduct a monthly usage fee, a transaction fee for any purchases made in stores using the card, ATM withdrawal fees, and card replacement fees. There is also the chance that a loading fee will be charged each time employer funds are loaded onto the card. If the payroll card program allows employees to spend more money than is currently in the account, the card provider will charge an overdraft fee, similar to a bank overdraft fee incurred when a balance is withdrawn from a current account.
Although a payroll card program provides many of the services and protections associated with a debit card connected to a checking account, the program may charge fees for transactions that are performed at no charge when using a bank-issued debit card. Depending on the specific payroll card program, the set of services may not be comparable to using direct deposit to a checking account and accessing funds via a debit card. For this reason, it’s important to ask a lot of direct questions before enrolling in such a program. Failure to do so could result in a series of fees that were not anticipated and significantly reduce disposable income.
Asset Smart.
Protect your devices with Threat Protection by NordVPN
