Question

Direct deposit is a popular way for employees to get paid. Research and report on the history of direct deposit. Has direct deposit been more of a benefit for the employer or for the employee? Describe your reasons.

Answer 1

Benefits to employers include:

1)Cost benefits.
2)Reduced risk of check fraud and lost or stolen checks.
3)Greater control over payroll and payroll expenses.
4)Timely payment of salary checks, even when employees are away from the office.
5)Reduced bookkeeping because of immediate payments into employee accounts (no lost checks, delayed check cashing, etc.).
6)Online transaction reports available immediately.

Benefits to employees include:

1)Timely depositing of checks.
2)Reduced time required for checks to clear.
3)Reduced chance of losing checks or having checks stolen.
4)No need to spend time visiting bank or ATM to deposit checks.
5)Payments can be divided automatically among designated employee accounts.
6)There is no cost to employees for direct deposit. In fact, many banks offer free checking services to individuals who will be paid via direct deposit.

Savings to employers are normally considered to result because of:

1)Reduced bookkeeping time to prepare payrolls, write checks, re-write lost checks, etc.
2)Reduced costs from check fraud.
3)Reduced lost work time of employees (who do not have to leave work to deposit checks).