How Payment Methods and Payroll Definitions Work Together

When you create objects, such as payroll definitions, third-party payment methods, and personal payment methods, you select a payment method to associate to the object. Understanding the functional relationship between the payment methods and the objects that use them is important.

Functional Relationships

This table helps you understand the functional relationship of payment methods with other objects.

Object	Function
Personal Payment Method	Associates a person to a payment method, currency, and payment source for payroll payments.
Third-Party Payment Method	Associates third parties, who aren't on the payroll, to payment information, such as currency and bank. Payments to third parties might be garnishcontrol how you pay ments or other involuntary deductions and are typically processed separately from the payroll.
Payroll Definition	Associates a default payment method for payments to employees when a personal payment method isn't defined. Note: You can't set EFT payment methods as default payment methods because each payee must have a personal payment method with bank account information to know where to deposit the money.
Run-Type Payment Method	Associates a default payment method for a run-type for payments to employees with no personal payment method defined. This overrides the payroll default payment method. For example, your regular payroll is by EFT but you issue check/cheque bonuses once a year. Using the Separate Payment run type, the payment method overwrites the default payment method of the payroll.