80% to 93%?

[PATAX]

I have read that from approximately 80% to 93% of American workers are paid via direct deposit. This appears to be a little high to me, especially the 93% figure. I believe approximately 1/2 of private sector employees are employed by small businesses. I would imagine that most small businesses do not use direct deposit for their employees, but I could be wrong. Here in Taxsylvania, I would say most small businesses do not pay via direct deposit, but obviously it is impossible to know for sure. What are all of you seeing out in your States?

[Jim-from-Ohio]

with my payroll clients it is a mixture.. I email the payroll stubs to my clients and a few still write checks out or loads laser checks into their printer and the stub and check print right out on that laser check..but i would say a majority of them either log into their bank and drop in the nets or have me do that step also.  

[IRonMaN]

We are seeing our small business clients using direct deposit more and more.  So 80% doesn't sound unrealistic.  The 93% sounds like it could be a little high, but not impossible.

[PATAX]

From what I have read online it looks like some states are really pushing this especially if the employee has a bank account. 

[qbteachmt]

"I believe approximately 1/2 of private sector employees are employed by small businesses. I would imagine that most small businesses do not use direct deposit for their employees"

My exposure mainly is to the businesses using QuickBooks, and nearly all of them do online/electronic payroll (inhouse or by their CPA). I taught payroll as a separate class for 8 years. The businesses would be considered small, even though there might be more than one location (one coffee/cafe company has 9 locations). If you consider that a small employer might have 5-50 staff, and a large employer might have 4,000-12,000, then I would not doubt those numbers based on staff, not on companies.

It's not for the same reason, but is the same process for one of my clients who runs an HOA with nearly 500 accounts. Everything is split into ACH batches, so even though they have monthly fees, they process different neighborhoods on different weeks.

Fraud avoidance is another reason. Nothing that is done by paper is securable. It's been 15 years since I ran payroll for an employer, and I'd been doing it by ACH template through the bank login since about 2002. You get a little dongle that is a random security code generator.

And a big impetus to change over to ACH/EFT/direct deposit is the "get your money now" services which allow paydays to be based on shift end. Gig workers get this, as "instant cashout."

[PATAX]

Thanks QB for that information. I looked up that new word dongle, I like to learn a new word each day. But I think I'm forgetting more words than I'm learning. I had to look up HOA even though I think I knew in the past, or should have known, that that was homeowners association.

[BobKamman]

The thing about small businesses is that they are small.  Yes, there are many of them.  No, they don't employ much of the work force. 

"According to the Census Bureau 2018 County Business Patterns survey, more than half (54%) of all employer businesses in 2018 had fewer than five employees but they   only accounted for 5.5% of total employment in all industries."

https://www.census.gov/library/stories/2021/01/what-is-a-small-business.html

And even many of those are now using payroll processing companies like ADP.  

This is where the 93% figure comes from:

"More than 93% of U.S. workers receive their pay via direct deposit, according to the 2022 “Getting Paid in America” survey from the American Payroll Association."

https://www.creditkarma.com/money/i/what-time-does-direct-deposit-hit# 

[PATAX]

Thanks for the information Bob. But I still don't believe that 93% figure, it just sounds too high.

[IRonMaN]

You are correct.  The actual number is 92.96946167877168718357147699% 😜

[BobKamman]

"Everyone I know voted for (fill in the blank), so therefore I don't believe (s)he lost the election."

[PATAX]

After the "weapons of mass destruction" lie, I would think that most rational people would be a little bit cynical about everything that they are being told. I would think that you two would agree with that.

[PATAX]

Motherjones.com has an excellent article about the weapons of mass destruction lie. I don't know how to do the link with this wack phone, but do a Google Search and you'll find it.

[TaxGuyBill]

---

@IRonMaN wrote:

You are correct.  The actual number is 92.96946167877168718357147699% 😜

---

Oh, it must have gone up a sept-tillionth.  The last I checked, it was only 92.969461678771687183571476989%.

🤣

[IRonMaN]

Sorry, that was my typo error.  I hope I didn't confuse too many folks. 🙁

[PATAX]

@IRonMaN you can type in just about any number you want to and there will be rocket scientists out there that will believe in it. But what do you expect from the crowd that drove on the little bus to school?

[PATAX]

@TaxGuyBill 👎

[IRonMaN]

For some more statistical information, 93 out of 80 Norwegians like this joke:

After years of marriage, Ole and Lena found themselves in bed one night.
Lena leaned over to Ole and said, “Ole, have you ever been
unfaithful during all our years of marriage?”
“Not even once!” exclaimed Ole.
“Lena, have you ever been unfaithful?”
“Well, er, yes,” she said. “But only tree times,”
she admitted, somewhat embarrassed.
“Hmmm, tree times?” questioned Ole. “Dat’s not so bad.
Do you remember dose tree times? Can you tell me when?”
“Vell, Ole, do you remember ven you wanted to build an addition
but had to get da okay from da building inspector?” she asked.
“Dat vas da first time.”
“And do you remember ven you wanted ta build da store and you had a hard time
getting approval from da city council?” asked Lena.
“That vas da second time.”
“OK, Lena, when vas da tird time?” asked Ole.
“The tird time vas ...” Lena paused. “Do you remember ven you were running for
president of Da Sons of Norway and you needed dose 125 votes?”

[Skylane]

@PATAX  Payroll companies have been pushing DD for years.  They've made it more expensive to use paper checks. We've been DD for our employees for years (whether they like it or not). 

Sadly, 1/2 of my clients under 30 don't have paper checks and wouldn't know what to do with them 

[TaxGuyBill]

---

@IRonMaN wrote:

“The tird time vas ...” Lena paused. “Do you remember ven you were running for
president of Da Sons of Norway and you needed dose 125 votes?”

---

😂