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Best ways to pay your employees: A complete guide

Best ways to pay your employees

According to the stats, 40-80% of total income goes into employees’ salaries. But the percentage could go up if you don’t use the proper methods. However, if you run a small business, one of the wise questions is to ask yourself how much you should pay the employees. It is evident that companies, especially the small ones, struggle with financial matters. Thus, it’s an essential point because, according to the Glassdoor:

“Around 67% of employees look at the salary before deciding whether they should take the job or not.”

Thus, if you want to retain top talent, focus on employee compensation methods. You can hire an excellent team to help businesses grow and profitability.

What are employee compensations and benefits?

Compensation is a payment to the employees for their services to the organization. But in another language, you can say it as wages. Besides, there are other things like bonuses and federal pay requirements that we can include in the compensation and benefits. The human resource department is an authority that is responsible for deciding wages and salaries. Here are the following factors that play a crucial role in setting compensation:

Competitive analysis Supply and demand Personal qualification
Skill level Labor negotiations Cost of living


The employer needs to negotiate salary within the company and new hires. But it’s vital to take wise payment methods because they can save a hefty amount.

Set up employee payments:

It doesn’t matter if you are self-employed or running an organization. You first need a payroll system and register yourself for EIN in each state where your employees live. Apart from this, it’s vital to look for the rules and regulations of the state where you plan to start work. In addition to this, check whether there is any other document or deduction you need to prepare. In addition to this, a good payment method helps to see whether there is any deduction or not. But if you are a beginner and things are getting overwhelming, you can seek professional help.

Best ways to pay employees: A complete guide:

There are many ways that companies can use to pay employees. But a good HR department is the one that adopts economical methods that are best for employees. Mainly, there are two types of employees who work in the organization:


The methods are different for each category, but the choice depends upon the type of employees. So, let’s look at the other techniques that are best for each category:

Traditional employees:

Traditional employees are those that work in an office setting. In this case, the whole responsibility of the employee is on the HR and the organization.

Direct deposit:

It is the most popular method that employers are using nowadays. Direct deposit is easy for both employers and employees. However, using this method, you can automatically withdraw from the company account and later deposit your salary separately for each employee. But in direct deposits, ensure you are crediting and debiting the right amount each month. In this way, you can make budgeting and money activities easy.


It is another option that most organizations are using nowadays. Printing cheques are a good alternative for direct deposits. Moreover, the best paystub generator

makes the cheques more accessible to enter. The employer can make the checks in the office or mail them to employees’ homes. But don’t forget to keep a record of cheques and trust that employees will submit them to the account without losing them. In this method, the bank balance doesn’t show the original balance because employees take time to cash their cheques.


It is the most popular method used by many small businesses and startups. But this method is pretty sketchy because the IRS will question whether you are making proper deductions or not. However, you need to check the beliefs and cashouts in detail. But this method isn’t recommended because you can quickly get into trouble. Mainly, here are the following ways that you can use to pay employees:


Hourly vs. salary Weekly payment
Semi-monthly Monthly payment


A wise businessperson is the one that uses the best option for payments. For instance, you can’t choose a monthly salary method if workers work hourly.

Virtual employees:

Virtual employees work from the home or any other remote location. These workers also work for multinational companies and startups. However, you can use these methods to pay virtual employees.


It is one of the most popular payment methods that is working around in the market. In this way, you can send the money immediately with a single click. It means you can breathe easily right after sending the payment. You only need the email account of the virtual worker that he is using for PayPal. The experienced workers usually have a PayPal account, so you don’t need to worry about that.


It is almost the same as PayPal, becoming a new trend in the business world. The service of this platform is good and supports over 150 currencies in more than 200 countries. But in terms of free, Payoneer is an expensive option; still, it’s helpful if you run a large business. Apart from this, Payoneer offers different packages that are convenient and more practical.

Apart from this, you can also use TransferWise and Bank transfer. But the bank transfers take longer, and the time could go up to 5 working days.


Conclugbv sion:

You should choose the method that goes best with your organizational needs. Every employee has different responsibilities that decide the paycheck. Here are other factors that determine the salary:

Job roles Responsibilities Work-related tasks
Skill level Years of experience The compensation you were receiving at your last job


But before choosing any payment method, there are many things that you should consider. For instance, look at the transfer fee, scams in the system, and organizational policy. Moreover, you can find the best paystub generator, and it would make processes easy.