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Curious about the data and assumptions behind the calculator? Our quick estimate relies on industry-average numbers for over 30 variables, which are summarized in the table below. Are some of your numbers for these variables substantially different? If so, you can fine-tune the results using your own payroll cost data by downloading the detailed version of the calculator. The more of your own company's data you can provide, the more accurate your results will be. Please note that this calculation focuses on variable payroll costs. Costs that do not vary with the payment method, such as taxes, are not included. Direct Deposit Calculator Details:Company Data |
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| Variable | Default Value | Source | Comments |
|---|---|---|---|
| Salaried payrolls per year | 24 | assumption | assumes bi-monthly |
| Hourly payrolls per year | 52 | assumption | assumes weekly |
| Average salary | $39,000 | Bureau of Labor Statistics | |
| Average hourly wage | $18.62 | Bureau of Labor Statistics | |
| Average cost of benefits | + 30% | Bureau of Labor Statistics | |
| Fully loaded salaried cost | $50,700 | calculated based on Bureau of Labor Statistics data | |
| Fully loaded hourly | $24.21 | calculated based on Bureau of Labor Statistics data | |
| New Hires per year | 10% | assumption | assumes 10% annual turnover |
| Does company use Positive Pay? | Yes | assumption | |
| Does company use Bank Reconcilement? | Yes (1) | assumption | |
| Does company use prenotes? | No (0) | assumption | |
| Does company physically distribute pay checks? | Yes (1) | assumption | |
| Does company mail paychecks? | No (0) | assumption | one of two distribution methods should be true |
| Does company distribute payment advices for direct deposit? | Yes (1) | assumption | assumes payment advices are not distributed via mail or email |
| Does company mail payment advices for direct deposit? | No (0) | assumption | one of three distribution methods should be true |
| Does company distribute payment advices by email? | No (0) | assumption | one of three distribution methods should be true |
Bank Costs
| Variable | Default Value | Source | Comments |
|---|---|---|---|
| Basic account maintenance | $25/month | Phoenix Hecht Cost Studies | |
| ACH account maintenance | $45/month | Phoenix Hecht Cost Studies | |
| Positive Pay maintenance fee | $42.50/month | Phoenix Hecht Cost Studies | |
| Account Recon Maintenance | $74.00/month | Phoenix Hecht Cost Studies | |
| Cost of an ACH credit | $0.10 | Phoenix Hecht Cost Studies | |
| Cost of a paid check with positive pay | $0.20 | Phoenix Hecht Cost Studies | |
| Cost of a paid check without positive pay | $0.16 | Phoenix Hecht Cost Studies | |
| Check Imaging Maintenance Fee | $0.00 | assumed negligible | spreadsheet allows for input if desired |
| Per check imaging fee | $0.00 | assumed negligible | spreadsheet allows for input if desired |
| Per check physical return fee | $0.00 | assumed negligible | spreadsheet allows for input if desired |
| Cost of a stop payment | $10.50 per payroll check | Phoenix Hecht Cost Studies | |
| Reconcilement cost per item | $0.056 | Phoenix Hecht Cost Studies | |
| Check cashing privileges | $0.00 | assume 0 | bank charges to allow employees to cash paychecks locally |
| Other bank costs check related | $0.00 | assume 0 | allows for input of other bank costs |
| Other bank costs ACH related | $0.00 | assume 0 | allows for input of other bank costs |
Other Costs
| Variable | Default Value | Source | Comments |
|---|---|---|---|
| Amount of company time employees spend cashing checks | 15 minutes per paycheck | assumption from prior studies | costs calculated for hourly employees only |
| Number of checks reissued | 0.1% | assumption | |
| Average staff time to research and clear a lost/missing check | 30 minutes per inquiry | assumption | includes both payee and payroll staff time |
| Time to distribute checks | 1 minute per paycheck | assumption | |
| Time to reconcile bank account | 4 hours per month | assumption | for each payroll account |
| Time spent on escheat processing | 8 hours per year | assumption | Escheat processing is the requirement to send the proceeds of all uncashed payroll checks to a specified government entity on a periodic basis. This is assumed to take 8 hours per year in staff time for normal processing. |
| Time spent mailing checks/statements | 2 hours per payroll | assumption | |
| Mailing costs | $0.42 per check | USPS | cost of first-class postage |
| Cost of check stock | $0.10 per check | typical computer check stock cost | |
| Cost of check storage | $0.00 | assumed negligible | spreadsheet allows for input if desired |
| Cost of payment advice stock | $0.10 | same as check | same cost as check if physically distributed or mailed - typically a voided check |
| Cost of envelopes | $0.06 | envelope cost from a major stationary supply | |
| Annual payroll fraud and duplicate check losses as percent | 0.1% | assumption | assumed at .1% of total check payroll |
| Time spent printing/bursting/signing checks per payroll | 4 hours per payroll | assumption | |
| Other internal payroll costs for checks | $0.00 | assumed negligible | spreadsheet allows for input if desired |
| Other internal payroll costs for direct deposit | $0.00 | assumed negligible | spreadsheet allows for input if desired |
| Average check float | 2.75 days | assumption of days to clear a payroll check | assumes Friday payroll with half cashed immediately and remainder cashed on Monday and Tuesday with half overall cashed/deposited at corporate bank |
| Average cost of funds | 5% | uses WSJ prime rate as of 9/28/08 | allows for input of other bank costs |
| Annual direct deposit solicitation costs | $0.00 | assumed negligible | spreadsheet allows for input if desired |