More employees than ever before using direct deposit: What’s next?

Encouraging news to pass along to your Payroll team! There are fewer direct deposit holdouts than ever before. That news comes from the latest Getting Paid in America survey from the American Payroll Association. 

Almost 96% of those surveyed receive their pay via direct deposit. The remainder are split by various methods, such as paper checks, paycards and online payment systems like PayPal and Venmo.

Most workers have used direct deposit for some time. But a handful of people (6%) specifically switched to direct deposit and other electronic wage payment methods due to the COVID-19 pandemic.

Not surprisingly, because a vast majority of employees use direct deposit, they also have no issues with the timing of their pay. In fact, 95% said they’re always paid on time.

They’re also pretty certain your Payroll team gets it right every pay period. Over two-thirds (67%) of those surveyed said they’re very certain the withholding and the net amount of their checks are correct each payday. Nearly 24% said they were somewhat certain this was true.

Employees have become more proactive about managing their withholding since the IRS released the redesigned Form W-4.

Many saw increased tax bills when this happened. Likely as a result, close to a third of survey participants completed a new W-4 in 2021 to adjust their withholding to have more income tax taken out of their checks.

A much smaller number, 13%, completed new W-4s this past year to have less income tax withheld from their pay.

All these developments are positive for your Payroll team. Reason: They make it easier to accurately pay workers with less hassle.

Keep momentum going

Even though these figures are encouraging, there’s always more Payroll can do to get employees on board. After all, the more people signed up for direct deposit, the more time and money your company saves.

Nacha maintains a website, directdeposit.org. The site has resources and info about direct deposit Payroll can pass along to the remaining holdouts. It explains how the service works and dispels common myths.