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#2239908 - 07/21/20 03:56 PM Business depositing payroll checks
Banker57 Offline
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Joined: Jul 2010
Posts: 439
Can a business deposit their own employees payroll checks back into the account that they are written from?

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Deposits and Payments
#2239916 - 07/21/20 04:12 PM Re: Business depositing payroll checks Banker57
rlcarey Offline
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Joined: Jul 2001
Posts: 81,346
Galveston, TX
Sure they can, but it is a potential sign of fraud - like fake employees or illegal workers. I would make sure I knew exactly what was going on.
The opinions expressed here should not be construed to be those of my employer:

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#2239971 - 07/22/20 03:55 PM Re: Business depositing payroll checks Banker57
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,043
Cape Cod
As a teenager, I had a job at a store that sold newspapers, magazines and comic books, tobacco products, candy, greeting cards and some gift items (even then Cape Cod was a summer tourist destination), and operated a soda fountain. Needless to say, it was a "cash only" business except for the wealthy summer home owners who subscribed to the big city newspapers and paid monthly by check. We were paid weekly, by check, and everyone on the payroll, from the owner down to the 14-year old (me), cashed their checks out of the till on payday. Those checks were deposited as part the day's receipts.

Fast forward 60 years to 2020 when many people use direct deposit or mobile deposit, there are still businesses that accommodate their employees by cashing their payroll checks, especially when the nearest bank might be distant, or the employee doesn't have a bank account.

As Randy notes, however, there are also abuses such as padded payrolls and the hiring of illegal workers that might also explain a business's deposits of its own payroll checks. The trick is in understanding what's going on, and that may take some questions of the business owner.
Last edited by John Burnett; 07/22/20 06:43 PM.
John S. Burnett
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