Types of Payment Options to Consider for Your Employee | Financial Buzz

Types of Payment Options to Consider for Your Employee

Choosing the best payment option for your employee is essential as a business owner. Finding the best one to use can be challenging due to the availability of several payment options, especially in the digital era. In some states, you are required by law to provide at least two payment options or face a fine.


It is best to choose a payment method that suits your business model. Considering the cost and responsibilities involved with each method will help you decide. Here are some of the payment options to consider:


Paychecks are one of the most popular payment options for many employers. You can write a paycheck or print payroll checks for your employees. Using this method, your employees do not need bank accounts to receive their wages. Only your business is required to have a checking account with a bank.

Paychecks leave a paper trail that will make tracking and auditing easier. It is also a traditional and familiar payment method for your employees and will not require extra training. It is essential to always accurately record the payments made as checks can be stolen or get lost.

Direct Deposit

Direct deposits involve transferring money directly from the bank to the employees’ bank account. It is a convenient payment option for both parties as you do not have to worry about paperwork, and your employees are guaranteed to receive their payments on time. You will need to collect your employees’ banking information and use electronic funds transfer to deposit their wages each payday.

Your employees are not required to be physically present at the workplace to receive their wages. It is crucial to consider the time frame required for processing to ensure your employees receive their wages on time.


Paying your employees with cash is a simple payment option as you do not have to deal with electronic processing. However, keeping accurate records when using cash to pay your employees is essential. You will be required by law to withhold taxes and other required deductions from the wages. Loans such as My Canada Payday can help you pay your employees on time.


It is quick and cheap as there are no processing fees required. It is also a flexible payment option as you can make emergency payments. Payments in cash are suitable for small businesses with few employees. It is best to be diligent with your paperwork to avoid being flagged for auditing.

Payroll Cards

Payroll cards, also known as pay cards, are prepaid cards that you can use to pay your employees by loading the wages for that pay period. The card can be used like a debit card, and employees can withdraw their wages through the ATM.

Pay cards can save time as they are entirely electronic, and an excellent option for employees without bank accounts. However, employees need to keep the cards safely as loss of the cards or theft can lead to loss of access to the funds.

Mobile Wallet

Technological advances have seen a rise in the popularity of mobile wallets, with more employers using them to pay wages to their employees. You can quickly deposit the wages directly to the employees’ electronic accounts. However, it is essential to consider the fees and state laws associated with the money transfer.


It is crucial to analyze the available payment options to find the best one for your business. Some payment options are better suited for some types of businesses than others. It is also better to consider the number of employees you have and their needs. The state may require some payment methods, and it is always best to provide more than one payment option.

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