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Uncover the real cost of writing cheques.

There’s a shift happening in payroll, as more businesses make the transition from paper cheques to direct deposit. Not only can a direct deposit service save you time and money, it can also serve to protect your business details, employee information and the environment.

Still considering whether or not you should cut out cheques? Consider these 5 compelling reasons to have your financial institution ― or a reputable third-party payroll provider ― electronically manage your deposits:

  1. Reduce fraud and increase confidentiality: Paper cheques are filled with details, such as your branch transit and address, your bank account number, and the name and address of your business. Anyone with the wrong intention could try to use that information to gain unauthorized access to your accounts. Direct deposit transactions, however, are safer and more reliable because your business information remains confidential in the hands of your financial institution or payroll provider.
  2. Save time and money: Even if you have just a few employees, direct deposit can save you time spent on administration, error resolution and bank visits, plus the cost of printing cheques. Wouldn’t you rather spend that time on improving your operation and advancing your core business proposition? Canada Revenue Agency estimates the cost to produce a single cheque is 80 cents while a direct deposit payment costs about 10 cents. On a small business scale, the cost can be approximately $2 per cheque versus 50 cents for direct deposit. Direct deposit also allows you to view transactions and catch errors 24/7, without waiting for cheques to be cashed, cleared or deposited.Based on the above small business estimates, the cost difference could be as follows:

  3. Paper Cheque Processing Cost
    Average cost/cheque: $2
    Direct Deposit Cost
    Average cost/employee: $.50
    Average cost for 20 employees:
    $40/biweekly pay period
    Average cost for 20 employees:
    $10/biweekly pay period
    Average annual cost for 20 employees:
    Average annual cost for 20 employees:


  4. Boost employee morale: The automatic nature of direct deposit benefits you and your staff. Employees can enjoy ready access to their salaries at the start of business on payday, and organize their investments accordingly. For example, they can assign different percentages of their salary into several accounts, such as savings and RRSPs, and set up automatic withdrawals to develop the habit of saving. Their payments will always be on time, and their money can begin to earn interest right away. These are real time-saving and convenience benefits that can translate into happier, more productive employees.
  5. The Government of Canada is making the switch: Ottawa initiated a campaign in 2012 to gradually phase out federal government cheques by April 2016. This initiative is expected to save the Canadian government approximately $17.4 million per year starting in 2014-15. It will also give Canadians a faster, more convenient, secure and reliable way to access their payments. If the federal government feels that the benefits of direct deposit warrant implementing this change on such a massive scale, your business likely stands to benefit from switching to direct deposit as well.

  6. Environmentally friendly: As with all electronic processes, direct deposit is paperless and reduces the environmental impact of your business. Part of the incentive for the Canadian government to make the switch is to achieve its targets as part of the Federal Sustainable Development Strategy by reducing paper consumption and greenhouse gas emissions. You can use the environmental calculator at to see just how much using direct deposit may help decrease your footprint ― saving pounds of paper and gallons of gas.

Want to help the environment at home as well as work? Refer to these 14 tips for a greener home.

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