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The Benefits of Using Direct Deposit

There are many benefits of direct deposit for both employers and employees. Both you and your employee might be able to save time and money.

What are the benefits of using direct deposit?

Below are the advantages for your and your employees of using direct deposit.

Benefits of direct deposit for employers

Here are ways direct deposit can benefit you:

  • You don’t have to write, print, or wait for checks to be delivered.

  • You can pay your employees no matter where you are located.

  • You can move toward paperless payroll.

  • You save money by not paying for checks, or check delivery

Benefits of direct deposit for employees

Here are ways direct deposit can benefit your employees:

  • Employees don’t have to worry about paper checks that might get lost or damaged.

  • Employees don’t have to go to a bank to cash or deposit the paycheck.

  • Employees have immediate access to their earnings on payday.

  • Employees can receive their pay even if they are not in the office.

  • Employees can easily divide their paychecks among multiple accounts.

Over 82% of employee use direct deposit. Free direct deposit

How to implement direct deposit

Implementing direct deposit is relatively simple. You can check with your business’s financial institution to learn about its direct deposit services. Or, if you use third-party payroll solutions, learn about their direct deposit services.

Once you have direct deposit set up for your business, you need to collect employee information. Information you need includes:

  • Employee’s name

  • Employee’s financial institution name and routing number

  • Employee’s bank account number

  • Percentages or amounts to deposit into each account

Depending on how you set up your direct deposit, you can either collect the information from employees and enter it yourself, or employees can enter their information themselves. If you use online payroll software, it may come with employee self-service. One of the benefits of employee self service portals is that employees can update their information on their own.

Direct deposit will go through the morning of the pay date for which they’d normally expect a paper check.

Mandatory direct deposit restrictions

Check with your state’s department of labor to stay compliant. If your state does not allow you to require direct deposit, you can still take advantage of the convenience and cost savings for those employees who do opt to use direct deposit.

If you want to experience the advantages of direct deposit, check out PayNortheast's online payroll software. The service comes with many features, including free direct deposit, free setup, free support, and a free trial. Try PayNortheast now!


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