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Useful Employee Pay Options for the Holidays


The holidays can often be a time of financial juggling for many Americans. Between holiday spending and preparing for expenses for the upcoming year, year-end may present many financial strains.

There are some relatively straightforward options that employers can offer to employees, such as paycards and split direct deposits — two financial vehicles that make it easier for workers to save.

Split direct deposits and paycards encourage savings because the money is automatically taken out of each paycheck, it's out of sight and out of mind for employees. As the money accrues each pay period, employees can save for items such as a down payment for a house or car, a vacation, or even end-of-year holiday cash.

Here's some background about paycards and split direct deposits:


Paycards (or payroll cards) first gained attention as a way for employers to electronically pay workers who are "unbanked," or to more easily set up payments for temporary employees. But paycards can also be a useful savings vehicle for workers who have their own bank accounts.

Employers that offer a paycard option can allow workers to automatically divert a specific amount or percentage of their pay to a paycard. The card could end up being for any purpose. For example, an additional card could go to an employee's child in college to pay for his or her expenses, or be used for holiday spending.


A paycard acts in a similar way to a debit card, with wages loaded onto workers' cards every pay period. Employees can use the cards to withdraw money at ATMs or banks, and to make purchases. They can track their spending online in the same way they would with online bank account access. If a card is lost, it can quickly be canceled, and a new card can be reissued. There is no additional cost to the employee when they elect to be paid via paycard.

Split Direct Deposits

If your company offers direct deposit of paychecks (electronically sending earned funds to workers' checking or savings accounts), another way to encourage your employees to save money is to have a split-to-save feature. Under a split direct deposit, employees can take a fixed portion of their paycheck each pay period and have it automatically deposited into a savings or certain investment accounts. As with paycards, the split direct deposit setup enables employees to more easily manage their finances and save effortlessly.

split direct deposit

Payment Options that Work for Your Employees

Offering paycards and split direct deposits for your workers can be a helpful extra benefit that enables them to better save for holiday gift-giving and other important future expenses.  When looking at paycard programs, look for ones that offer multiple ways for employees to access their wages free of charge, including unlimited free withdrawals at in-network ATMs and over-the-counter bank withdrawals.

Paychex offers a selection of payroll options, including paycards and split direct deposits. Choose those that best meet your employees' needs and the operation of your business.

Laura Cottrell is a compliance analyst at Paychex, She also serves as the chair of the American Payroll Association's (APA) Electronic Payments Committee.
This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.