How Payment Methods and Payroll Definitions Work Together

You select organization payment methods when creating other objects, such as payroll definitions, third-party payment methods, and personal payment methods. This topic describes the functional relationship between organization payment methods and the objects that use them.

Functional Relationships

This table describes the functional relationship of organization payment methods with other objects.

Object	Function
Personal Payment Method	Associates a person to a payment method, currency, and payment source.
Third-Party Payment Method	Enables separate payment information for payments to third parties who aren't on the payroll. Payments to third parties, such as garnishments or other involuntary deductions, are typically cheque payments processed separately from the payroll.
Payroll Definition	Establishes the payment method for payments to employees who have no personal payment method defined. Note: You can't set Direct Deposit payment methods as the payment method because each payee must have a personal payment method with account information to know where to deposit the money.
Run-Type Payment Method	Overrides a payroll's payment method for payments to employees with no personal payment method defined. For example, your regular payroll is by Direct Deposit but you issue cheque bonuses once a year. Using the Separate Payment run type, the payment method overwrites the payment method of the payroll.