What Types of Fees Are Charged for Payroll Cards?

Payroll cards offer a distinct method for employers to disburse wages, serving as an alternative to traditional paper checks or direct deposit into a bank account. These cards, which function much like prepaid debit cards, provide immediate access to funds for employees, especially those without conventional banking relationships. While convenient for wage receipt and spending, payroll cards often involve various fees. Understanding these potential charges is important for effectively managing personal finances and avoiding unexpected deductions.

Transaction Fees

Payroll card users may encounter fees related to daily card operations. While most payroll cards do not charge for standard point-of-sale purchases, certain transactions might incur a fee, such as for debit transactions after free limits are exhausted. Balance inquiries, particularly at out-of-network ATMs or through a live customer service representative, often incur fees ranging from $0.50 to $2.00, though automated phone or online balance checks are often free. Additionally, a fee may be assessed for transactions declined due to insufficient funds, serving as a deterrent against overspending the card’s balance. These charges cover the administrative costs associated with processing such requests or failed transactions.

Account Maintenance Fees

Payroll cards can also carry fees for account upkeep and administration. A common example is a monthly or annual maintenance fee, which can range from $0 to $5.00 per month and is typically deducted directly from the card’s balance to cover program management costs. Inactivity fees are another type of maintenance charge, levied when a card has not been used for a specific period, such as 90 days or more. These fees, which can range from $2.00 to $5.00 per month, offset the cost of maintaining dormant accounts. Cardholders should review their cardholder agreement for the defined inactivity period to avoid these charges, as some cards might also impose low balance fees if the account balance falls below a certain threshold.

ATM and Cash Access Fees

Accessing cash from a payroll card often involves fees, particularly when using Automated Teller Machines (ATMs). While many payroll card programs offer free withdrawals at in-network ATMs, using an ATM outside of the designated network typically incurs a fee from the card issuer, ranging from $1.00 to $3.00 per transaction. Additionally, the ATM operator may impose a separate surcharge, displayed on the ATM screen before the transaction is completed. For larger cash withdrawals, cardholders may perform an over-the-counter cash withdrawal at a bank or other financial institution. Many payroll cards allow at least one free teller-assisted withdrawal per pay period, and employees generally have the right to access their entire paycheck free of charge at least once per pay period.

Other Charges

Other charges can also impact payroll card users. If a card is lost or stolen, a card replacement fee is typically charged, usually ranging from $5.00 to $12.50, with additional fees sometimes between $15.00 and $35.00 for expedited delivery. Foreign transaction fees are common for international transactions or purchases in foreign currencies, generally a percentage of the transaction amount, typically ranging from 1% to 3%. Some payroll card providers may also offer optional services, such as bill payment, which could involve a small fee per transaction.