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Once the payroll computation for the current cycle is through and salary register is approved, the Net Pay will be disbursed to employees using any one of the mode of payments:

  • Direct Debit: the money is directly transferred or debited to the employee's bank account
  • Cheque: a cheque is given to the employee to deposit in own bank account
  • Demand Draft (DD): a Demand Draft is obtained and given to employee
  • Cash: cash payment

Today, with the advancement of technology and availability of salary bank accounts, most organizations follow direct debit and employees receive salary in their respective salary bank accounts.

For newly joined employees, if salary account opening takes time, companies perform cheque payment for the first month's salary.

For outstation employees with no salary account, DD is preferred because cheque clearance will take more time.

Cash payment is a preferred way of salary disbursement for some specific industries; mostly where contract workers or employee with semi-skilled/unskilled workmen are employed. These employees will not be in a position to open bank accounts and their salary will be either minimum wage or just above that. It is mandatory to get the signature of employees in salary register as a proof of disbursement of salary, when salary gets paid in cash mode.


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