A paycheck, also spelt pay cheque, is traditionally a paper document issued by
an employer to pay an employee for services rendered. In recent times, the
physical paycheck has been increasingly replaced by electronic direct deposits
to the employee's designated bank account or loaded onto a payroll card.
Employees may still receive a pay slip to detail the calculations of the final
payment amount. A payslip, pay stub, paystub, pay
advice, or sometimes paycheck stub, is a document an employee receives either as
a notice that the direct deposit transaction has gone through, or is
attached to the paycheck. Each country has laws as to what must be included on
a pay slip, but which would typically include details of the gross wages for
the pay period and the taxes and any other deductions the employer is
required to make by law; as well as other personal deductions such as
retirement plan or pension contributions, insurances, garnishments,
or charitable contributions taken out of the gross amount to arrive at the final
net amount of the pay, also including the year to date totals in some
circumstances. Electronic paychecks
In most countries with a developed wire transfer system, payment of wages and
salaries is increasingly being effected by electronic means, rather than by the
use of a physical cheque. This saves the company money on printing and processing
cheques and reduce the problem of fraud. However, vocabulary referring to the
figurative "pay cheque" persists in some languages, but this commonly refers to a
payslip or stub rather than an actual cheque. Some company payrolls have
eliminated both the paper cheque and stub, in which case an electronic image
of the stub is available on a website. Most of the provinces and territories in
Canada allow employers to issue electronic payslips if the employees
have confidential access to it and are able to print it.
Most major organizations are sending out payslips via electronic format, either
by email, or shared HR console. Payroll card
For employees that do not have access to a personal bank account, most major
payroll service providers can arrange for the net pay of an employee to be
loaded onto a payroll card, which is a plastic card similar to a debit card. A
payroll card functions like a debit card and allows an employee to access their
pay. A payroll card can be more convenient than cashing a pay cheque,
because the card can be used at participating automatic teller machines
to withdraw cash or in stores to make purchases. Some payroll cards are
cheaper than payday loans available from cheque cashing stores, but others are
not. Most payroll cards will charge a fee if used at an ATM more than once per
pay period. The payroll card account may be held as
a single bank account in the employer's name. In that case, the bank account
holds the payroll funds for all employees of that company using the
payroll card system, and an intermediary limits each employee's draw to an amount
specified by the company for a specified pay period. Some payroll card programs
establish a separate account for each employee. Most payroll card accounts in
the United States are insured by the Federal Deposit Insurance Corporation.
Payroll warrants Payroll warrants look like cheques and
clear through the banking system like checks and are therefore often called
paychecks by their recipients. But they are not checks because they are not
drawn against a checking account. Instead they are drawn against
"available funds" that are not in a bank account so the issuer can delay
redemption. In the U.S., warrants are issued by government entities such as
the military and state and county governments for payroll to individuals
and for accounts payable to vendors. Deposited warrants are routed to a
collecting bank which processes them as collection items like maturing treasury
bills and presents the warrants to the government entity's treasury department
for payment each business day. In the UK, warrants are issued as
payment by National Savings and Investments when a premium bond is
chosen. References