Have you ever received a check for a really small sum?
Did you cash it?
The other day I received a check for $.36 (not a typo, 36 cents!). It was the first time I remember thinking, 'it would cost me more money to cash this check, than this check is worth.'
How much does it cost your employees to cash their checks?
Math: let's say $3.80 for a gallon of gas today, 2 miles each way to the bank. Let's say 20 minutes door to door (standing in line at the bank or depositing via the ATM). And how much is your employee's time worth (20 minutes, 1/3 of what they make an hour)?
Some banks may charge fees for cashing a check if the employee doesn't bank there (it might be the closest one to the office), or doesn't have the right level of bank account. Also, if it's a deposit, funds may not be available for a few banking days (is rent due this weekend?).
...And how much does it cost you as an employer?
Bankers will tell you, often the only time people stand in line is on pay day. That's every friday, the 1st, 15th, and end of the month, and the next banking day after holidays. That 20 minutes might be more than 20 minutes.
Did they leave on their lunch break?
Will they make it back in time, or are you paying them to wait at the bank?
How much do they earn every 15 minutes, and how much in payroll taxes are you paying to the government on that employee while their away?
There's another option.
If you utilize direct deposit, funds are available on pay day, and no one has to leave the office to cash a paycheck. Offering direct deposit could save yourself and the employee a significant amount of time and money.
