Direct Deposit for "Surprise" Bonuses

Julie Lam's Profile

Every year our company distributes an annual bonus to our employees of which there is an element of surprise in the amount of the bonus.  It's mostly based on the profitablity of the company so no one really knows how much they are going to get until the day of the bonus.  To maintain the element of surprise the company has always paid this bonus by check and hand delievered the checks to the individuals on bonus day.  And then everyone goes and parties. 

We really want to get rid of the paper part of the process aka checks, but are concerned about the element of surprise.  I know that some banks, particularily credit unions, can prepost the transcations sent via ACH, which would then be viewable by the account holder even though the funds are not available until the value date of the transaction. 

Any ideas?  Pay cards were dismissed as that seemed just as much of an administrative headache as a check.  Wires are too expensive.  Is this possible?

Answers

Member's Profile

I'm not sure how many employees you have or if this suggestion will be just as daunting as paper checks; but, I love using PayPal for my personal company. It will be free for your company and employees. You can send "email or text checks" to each employee, at the moment you choose - would even been fun to do during the party. You can see them looking at their phones and observe facial expressions as they spread the word to other employees.

You may want to reach-out to a PayPal Executive for the best method and to cover all your concerns.

Recipients in the United States can withdraw money you send using one of the following options:

-Spend the money online at thousands of stores that accept PayPal
-Free transfer it to their local bank account (takes 3-5 days)
-Request a check (costs $1.50 and takes about 7 days)
-If they have a PayPal debit card, they can use it to access the money you sent

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Proformative Advisor
Member's Profile

Unless you have hundreds of employees, why not make "paper checks" the surprise? You can get rid of them for regular vendors and PR, everyone in the company will be aware you don't use paper checks.

Now use them for the bonuses...

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Member's Profile

My company uses ADP payroll to direct deposit surprise bonuses in the employee's bank accounts a few days after the employee is informed of the bonus. At the time we discuss the bonus with the employee, we let them know the day that they should expect the bonus in their bank account.

For annual bonuses, we present the employee with a printout calculating their bonus on the Wednesday prior to direct deposit into their bank account on Friday. At the meeting, we walk the employee through the bonus calculation and discuss any preformance issues that may have increased or decreased the bonus payout.

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Proformative Advisor
Member's Profile

Our employees receive a pay stub for each payroll anyway, so we just schedule the direct deposit a few days in advance and give them the pay stub showing the 'surprise' bonus amount. We quit giving out checks a few years ago after employees accustomed to receiving the the stubs for direct deposits failed to cash the live checks. A couple even shredded them - therefore creating even more work.

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