{"id":195,"date":"2022-11-10T08:43:02","date_gmt":"2022-11-10T16:43:02","guid":{"rendered":"https:\/\/embedded.gusto.com\/blog\/?p=195"},"modified":"2025-09-03T16:36:31","modified_gmt":"2025-09-03T23:36:31","slug":"embedded-payroll-101-movement-of-funds","status":"publish","type":"post","link":"https:\/\/embedded.gusto.com\/blog\/embedded-payroll-101-movement-of-funds\/","title":{"rendered":"Embedded Payroll 101: Movement of Funds"},"content":{"rendered":"

This blog is part of the Embedded Payroll 101 Series \u2013 The Depths of the Payroll Stack<\/a>\u00a0 |\u00a0 Payroll Calculations<\/a>\u00a0 |\u00a0 Movement of Funds<\/strong>\u00a0 |\u00a0 Tax Payments, Filings, Compliance<\/a>\u00a0 |\u00a0 Fraud, Credit Loss, and Security Tax<\/a>\u00a0 | \u00a0Migrations & Transfers<\/a><\/p>\n

What Payroll Providers Need to Know About the Movement of Funds<\/strong><\/h2>\n

Many payroll providers may sigh relief when they have factored in all that can go wrong with payroll calculations and tax requirements and have a system that works smoothly. But there is more to the payroll process than just calculations and taxes. Now everyone needs to be paid. Here, payroll providers will want to provide services that include the movement of funds. And here, more things can go wrong and become messy.<\/span><\/p>\n

Just as an iceberg hides most of its mass below the surface, the seemingly straightforward act of payroll masks immense and intricate operational complexities. <\/b>Beyond calculations and compliance, the secure and accurate movement of funds is a critical hidden depth that, if mishandled, can lead to significant financial penalties and operational disruptions. When you embed payroll, you’re not merely integrating with a third-party API; you’re buying the infrastructure behind payroll from a partner, which includes mastering these complex fund movements.<\/p>\n

\"Iceberg<\/p>\n

What is the Movement of payroll funds?<\/strong><\/h2>\n

Movement of funds involves transferring the funds acquired by the employee from services performed and their tax requirements to reach the right destination or bank accounts in a timely and predictable manner. It may sound like a minor step, but nearly <\/span>$9 trillion moves through the payroll system<\/b> annually. It is the lifeblood of the economy. And if this were to fail, all the efforts to provide accurate calculations of hours and taxes would be for nothing.<\/span><\/p>\n

What is Involved with the Movement of Funds<\/strong><\/h2>\n

The assumption is often made that the movement of funds is merely a transfer of money from the employer to the employee. However, it is a three-party process and sometimes involves additional operations involving the employer, the employee, tax agencies, and financial institutions that assist with the movement of funds.<\/span><\/p>\n

There are multiple steps in each payroll submission:<\/span><\/p>\n