Paper Payroll Statements Are Going Extinct. But they Have Benefits.
A few years back, my employer made a change to move everyone over to an electronic payroll system. In order to continue receiving an old fashioned paper payroll statement, you had to actually opt-in for it, or you’d default to having to log in to an account to see your pay statement. At the time, it was sold as the modern and convenient thing to do. Paper? That’s soooo last century!
The reality is that I’m sure they did this as a cost cutting measure, and I’m sure many other companies have done so as well. Maybe even yours? Some back of the napkin math on cost savings… $0.66 (postage) + $0.50 (estimated cost to produce) x 26 pay periods = $30.16 per employee per year. Multiply that by 1,000, 10,000, or 100,000 employees, and you have a legitimate expense and easy cost cutting target.
The sentiment around the office at the time of announcement would be best summarized as, “Oh, that’s fine. I never really looked at them anyway. And now I can get them online, if needed.”
But, I had a completely different perspective.
I immediately opted in to continue receiving my ole fashion paper statement (despite enrolling for direct deposit from day #1), and still gladly receive it to this day. And I strongly recommend that you do the same!
Why? Here’s my thinking…
1. What else do you have to remind you that you actually do something of value?
Sure, I can check the digital numbers in the cloud in my bank account to see that they have ticked upward every few weeks. But I’m a freakin’ desk jockey! As a white collar worker, there is very little that reminds me that I actually do something of value. My “production” is often in the form of a document (spreadsheet, presentation, email). At best, it’s in the form of a revenue number that I made for the company.
There’s no physical good or service produced – a bicycle put together, furniture crafted, home renovated, wall built, vehicle manufactured, landscape landscaped – EVERYTHING IS IN THE DAMN CLOUD! I think this is partly why so many white collar folks are dissatisfied with their jobs – they never get to truly lean back and observe the fruits of their labor. It’s always “on to the next project”.
My paper payroll statement reminds me that I actually did produce something that someone values – and it reminds me EVERY two weeks.
2. Occasionally, computers (or payroll) do screw up.
Sometimes payroll gets it wrong. I look over my pay statement every time it comes for errors.
- Did I get reimbursed for that personal expense?
- Was my 401K matched properly?
- Was I charged the right amount for my HDHP premium?
- Was my HSA deduction correct so that I can reach the maximum HSA contribution?
Last year, I had noticed that a massively incorrect deferred compensation payment was made. It was later corrected, but had I not seen the numbers on my paycheck, I would have never known.
And my wife has noticed payroll errors, which are much more common than one might think.
I’m a salaried employee, but if you are compensated hourly, checking your payroll statement to confirm you are getting paid for the hours you’ve worked is essential. My wife noticed earlier this year that she was missing an entire 12-hour shift and had to submit a correction. Without watching her paper statement, she probably would have never known an error was made.
3. How are you pacing for tax purposes?
If you work hourly or receive bonus compensation that fluctuates throughout the year, it is very important to know where you are at on your taxable adjusted gross income, so you can determine the tax impact.
This can guide you on whether you need to change your withholding taxes or make additional pre-tax contributions to 401Ks, HSAs, and other accounts, so you can avoid getting taxed in a higher tax bracket.
Again, out of sight is out of mind.
4. What if the unexpected happens?
Sometimes the unexpected happens and businesses close, buildings burn down, servers crash or get hacked, or you no longer have a job. How are you going to check your payroll statement when these things happen? Are you going to have everything photographically memorized? If not, you’ll be thankful you have a paper record.
Final Thoughts on Paper Payroll Statements:
I should note that I elect e-statements for EVERYTHING aside from my payroll statement. There’s just too much at stake with that one. Having proper reminders and record of compensation for what you spend the majority of your waking hours doing is still essential (and psychologically rewarding), in my opinion.
What say you?
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I 100% agree that you want to have a copy of your paystub (I’ve had issues in the past after making changes to HSA or 401(k) contributions). However, as long as you can obtain them online, I do not believe there is any reason to actually opt in. My wife’s old company switched from paper to online and it took her a couple minutes twice a month to print the statement off, which isn’t that big a deal.
The point is that it’s very easy to forget and overlook. So… what if you could have a simple/easy way to have it automatically sent directly to your house?!
All of the reasons you cite for keeping a physical paystub outside of the psychological piece of “production value” can be obtained by simply reviewing your paystub regardless of format. Honestly, the bigger issue in all of this is the presumption that individuals review a paystub at all. As a salaried employee, I review my paystub once a year when the benefits election takes place and my premiums change. I verify my annual contributions to 401k based on my W2 and cross check against my 401k account for the same period. Your W2 can provide you all of the information you’ll ever need on a historical basis. Even if the company went out of business, they’ll still need to provide you information for tax reporting. Also, many companies process payroll through a payroll processor (ADP, Ceridian) so the issue of document retention is a moot point.
IMHO, I’d rather have my employer invest the savings of providing me a paper statement back into the business as this is a non-value added activity.
I agree with you. A couple of years back, I was in the same situation and decided to continue receiving my paystub. I’m glad i did.
I physically print out my paystub as well as the timesheet I used to submit it with. I check both every 2 weeks as they come. If you wait any longer than that, you probably won’t catch any errors should they come.
Generation dependent I’m afraid.
Remember when we used to need a paper statement in order to tell us that we had a utility or phone bill to pay?
I think the next generation will question the value of getting anything other than a photo in a physical form.
I do however agree with you, and prefer to have a paper statement – not that I opted in, but you have given me pause for thought.
I can definitely relate to this. I myself have gone completely paperless but having a payslip at the end of the month does show your reward. I have gone paperless with virtually everything else, only my mortgage statement and payslips are still in paper form which serves as a constant reminder to get my financial priorities straight. Great post, thanks for sharing.
I do not agree.
While I don’t login every month to see my payroll I do make sure the deposits are in order. MINT helps with that. I don’t see the point of having paystubs mailed to me. Also I’m not sure that I could. I print them off every year for posterity but I don’t often check the paper copies. I just look online to make sure things are in order if something seems off although it never has been in the two years I have worked for my company.
Receiving a paper copy is not an option but I receive an electronic paystub in my work e-mail each pay period in the form of a .pdf, so I review and then save that .pdf to my personal computer. I like that the e-mail with the .pdf, similar to a postal letter, discourages a passive approach.
Whether it’s payroll check, bills, or bank account statements, there are times you need access to these records.
If you don’t get a paper copy mailed to you, you have a few options:
1. login when you need to access it
It is very cumbersome to do this, there are times that the web site won’t be accessible, and you may permanently lose access when the account is closed. Searching a series of statements can be extremely tedious.
2. save it as a file on your computer
This is extra work (more so than tossing the paper statement in a box); if your disk ever crashes, you’ve lost it all (which is far more likely than a fire). Of course we should be making backups, but this doesn’t always happen.
3. print it out each month
This is just another burden. Having the bank or employer spend the money on postage is just more efficient.
I agree that you should keep track of your salary but I believe it really does not matter whether its available on line or in paper form. I know of folks that never open their paper stubs, they just let them pile up. If you want to track your pay you will remember or at least figure out a way to help you remember to view it. Those of us who are financially savvy most likely do this on a regular basis but those who are not are the ones who don’t make an effort no matter whether they receive a paper stub or get one electronically.