Pizza News

Is paperless payroll possible?

When assessing your business’ systems and operations, changing your way of doing payroll may be the last thing that comes to mind. However, payroll is an essential ingredient in the overall recipe for business success. An efficient payroll process keeps employees happy and business operations streamlined. However, business owners need to evaluate what form of payroll is the best for their businesses and which is preferred by employees. 

Direct deposit is the most common way for employees to receive a paperless form of pay, but the FDIC estimates that 25% of U.S. households rely on non-bank financial services, and millions of those underbanked wage earners still receive paper paychecks. A business that offers direct deposit but still distributes paper paychecks is losing a significant amount of time and money. A business can’t force employees to receive direct deposit or open a bank account, but is there an alternative option?

Electronic Pay Distribution

Payroll cards are now a popular solution for businesses looking to cut costs, paper and time. The cards operate similarly to a reloadable prepaid debit card, with funds directly deposited to the prepaid account each payroll cycle. The cards possess many of the benefits of having a bank account: They can be used anywhere debit cards are accepted, and pay programs may also come with convenience checks. 

According to an informal calculation from, a company with 100 employees can save nearly $19,000 per year by switching to paperless payroll versus paper paychecks. This calculation is based on all employees switching to electronic deposits from paper checks, with 50% of employees salaried and 50% paid hourly. Payroll cards not only provide cost savings; they also provide employees with faster access and greater security.

Payroll cards empower employees by providing easy access to ATMs, as well as online or in-store shopping wherever the branded debit card is accepted. Some programs also provide the ability to write checks and receive additional payroll funds from other employers. Employees enjoy immediate access to funds, eliminating the time and money wasted on check cashing. Payroll cards help cut operating costs, make payday more convenient for employees, and help make your operations a little greener by decreasing paper consumption and distribution. 

You may think your business is too small or large to implement a streamlined, paperless payroll program, but businesses that employ 10 to 30,000 employees can all experience benefits from direct deposit and payroll cards. For example, say your small pizza chain has 50 employees who are all on hourly wages and paid every two weeks, and more than half of these employees still receive paper paychecks. For a small pizza chain trying to succeed in a tough economy, payroll is an area that can help quickly reduce annual fees. By switching employees to payroll cards, a business could save more than half the cost of printing and distributing paper paychecks. 

Another method for achieving 100% paperless pay is through an electronic pay stub distribution. Electronic pay stubs can be delivered through a website, automated phone system, on-demand pay stub printing device (some states require printable stubs), email or text message. Pizzerias of all sizes can take advantage of a payroll distribution and pay stub distribution program and tailor it to fit their business needs.


Introducing a paperless payroll solution into the payroll process is easy, but due to the sensitive nature of payroll and employee relations, it does require some up-front planning. Some keys to successfully roll out a payroll solution include:

Executive buy-in and an executive-level champion of the change to an electronic program

A definition of success for the program. The basic goal of an electronic payroll project is to move 100% of employees to an electronic form of pay distribution, whether it is direct deposit, payroll card or convenience checks.

A clear statement of the reasons for making the change. An employer should draft a “Reason for Change” statement, which should be brief and easily understood. It should explain what is happening, why it matters and when to expect the change to occur.

A communications strategy that clearly states the program and its benefits to both management and employees. The communication strategy for informing people about the impending change in pay distribution practices needs to address the issues of the two core stakeholder groups: management and employees. The management strategy should lay out the corporate reasoning for moving away from paper paychecks. The employee strategy will outline specific benefits and create peace of mind about the new program.

A welcome kit that simplifies employee enrollment in the program. The welcome kit contains all of the information that new and current employees need to use the payroll distribution service, its benefits, phone numbers for customer service and how to report lost or stolen cards, and other information pertinent to the program.

A corporate commitment to adhering to the plan.

Fee and Security Concerns

Employees will need to understand the various transactions available, and which transactions may have fees in the payroll program, as this varies from one provider to another. Typically, there are certain services provided for free, while others contain fees. 

In general, however, payroll cards work like debit cards. At the point of sale, employees may swipe the card and select “debit” to enter their PIN (which allows the popular cash back option) or may select “credit” to sign for the purchase. Signature purchases do not cost any fees to the employee. 

Many providers offer one fee-free ATM withdrawal per pay period. This way, if the employee wishes to withdraw cash on payday, it is equivalent to cashing a paycheck without fees. After that, there may be fees for ATM withdrawals or other services.

Finally, branded paycards (Visa, MasterCard and Discover) offer customers protection against fraud liability. If an issued payroll card is lost or stolen and the employee promptly reports the loss, he will be protected against lost funds.

Jeff Johnson is the senior vice president and division manager of First Data’s prepaid business, helping enable employers to enjoy the cost benefits of paperless payroll.