Mar 2022


How can I pay employees?

According to the 1991 Payment of Wages Act, the method which will be used to pay an employee their wages should be clearly stated in their contract of employment. Employers have the option to pay their employees by cash, cheque, bank draft, postal order or by credit transfer to an account specified by the employee. Whether an employee is paid weekly, monthly or whichever pay interval you have set out in the employee’s contract of employment, employers should ensure that employees are always paid on time.

The method by which you pay your employees will not only affect the efficiency of your payroll but depending on which method you choose and how well you use that method, it can also impact your business’s reputation and even employee morale. Listed below are three of the most common methods of paying employees and their advantages and disadvantages.


What is the best method of paying employees?

1. Cash

Some employers may feel that paying their employees in cash is the quickest and easiest option. Paying by cash means employees will have instant access to the funds and there are little to no administrative costs involved. However, while it is perfectly legal, using cash is not always an efficient way of paying employees.

Your payroll software will keep a record of the amounts to be paid to your employees each pay period, including all additions and deductions. However, when you pay in cash you will have no record or proof that the payment has been made. It is advised, when making cash payments, that you have your employees sign a document to confirm that they have received their wages and the amount which they have received. This can mean that there will be more administrative work involved than you may have thought. When paying employees by cash, it is also important that you are aware of the security risk of having a large amount of bank notes on you or at your business premises.

Since the COVID-19 pandemic, hybrid working has become the norm. This means that in some businesses employees are now working from different locations, with many employees working from their home. If you have employees who are working remotely for part or all of their working week, it may no longer be viable to pay them by cash. And while legally you can send cash by registered post, it is not covered by insurance under the Registered Post service.



2. Cheque

One advantage paying employees by cheque has over paying employees by cash is that once the cheque has been cashed or lodged by the employee, you will have record that the payment has been received. However, employees may not always be happy about being paid by cheque as it means there is a wait period between them receiving the cheque and them being able to access the money. Cheques drawn on Irish banks can take up to 5 business days to clear, meaning employees may not be able to access their wages till up to over a week after pay day. Plus, if you are sending employees their cheques by post, this can lead to further delays and you may end up with some very disgruntled employees.


3. Credit transfer

Perhaps the most common method of paying employees is through a credit transfer. This is when payment is taken directly from the employer's bank account and paid into the bank account specified by the employee.

Paying employees by credit transfer means there will be a complete record of when the employee was paid and the amount which they were paid. The SEPA (Single Euro Payments Area) system was first introduced into Ireland in 2014 and had many advantages over the previous system. When using SEPA to transfer payments it only takes one business day to clear compared to the three business day turnaround for older systems.


What is the easiest way of paying employees by credit transfer?

You can now pay employees using SEPA, directly through your payroll software. BrightPay Payroll software now has full integration with payments platform Modulr, providing payroll processers with a quick and easy way to pay employees.

To use this new functionality, you first must sign up to a Modulr account and pay any associated fees to Modulr. Then, once a payroll has been finalised, you simply choose the “Pay by Modulr” option in the payroll software. From there you log into your Modulr account and you will be asked to authenticate your login using your mobile device. Once logged in, simply follow our online guide and you will be able to pay your employees quickly and easily with only a one-day turnaround.


What are the benefits of paying employees directly through BrightPay?

Paying your employees by credit transfer using our new integration has the most benefits for employers when compared to other payment methods, including:

  • Little administrative work
  • A one-day turnaround
  • Flexibility to change payments up until the day before
  • Fully traceable and secure

To learn more about BrightPay’s new direct payments feature, why not book a free online BrightPay demo today. Or, you can watch our webinar discussing how our new integration can benefit your business.