Mastering Salary Disbursements: Automation and Efficient Payment Methods

January 15th, 2024 by Felix Cheruiyot

salary disbursement

Automating salary disbursements ensures speed, efficiency, and enhanced security. Discover the best salary payment methods and tools for automating salary disbursements.

Employee attendance relies significantly on timely salary disbursements. Delay or fail to pay them when due and they could down tools.

Where salaries are routinely paid late, workers find it hard to plan their expenditures. Those whose skills are in demand will seek jobs elsewhere. So it’s essential that your workers receive their pay on time.

But if the business is solvent, why should a business fail to pay its workers, one of its most important resources?

Manual payroll processes often pose significant administrative challenges. The solution is automation, which you will learn more about in this article. We will start by explaining what it means when a salary is disbursed.

What is salary disbursement?

Salary disbursement is the periodic transfer of financial compensation by an employer to an employee for the time worked. It is the process of paying workers at the end of a pay period, which is typically a month.

When you disburse salaries, money is moved from your bank account into the employees’ accounts. That movement or transfer of funds is what’s referred to as salary disbursement.

Referring to salary payments as payroll disbursement is technically inaccurate. Payroll is not disbursed; it is processed. To understand that better, let’s distinguish between salary and payroll.

Salary vs payroll

A salary is the amount of money an employee of a company earns at the end of every pay cycle. It is paid regularly. Payroll, on the other hand, is the process of determining the net salary an employee will earn at the end of a pay cycle, after taxes, salary advances, and other deductibles have been factored in.

Even though the pay cycle is usually one month, a salary can also be expressed in yearly terms. For example, a company can offer a prospective employee a salary of Ksh1 200,000 per year. Even then, however, the salary will usually be paid monthly, which would be Ksh100,000 for the same employee.

Payroll maintains a comprehensive list of employees and calculates pay based on factors such as:

Payroll also accounts for promotions within the company, including adjusting the PAYE band for the promoted employees so the correct amounts are deducted and remitted to the KRA (Kenya Revenue Authority).

Apart from maintaining a list of all salaried employees in your company, your payroll will also include their personal information, including:

Is there a way to automate payroll?

Manual payroll processing, even for smaller staff, involves intricate calculations and demands substantial administrative resources..

To make payroll more efficient, reduce costs, and improve record-keeping, reporting, and data security, you can automate your payroll function with software.

Currently, only a few companies continue to handle payroll manually. However, those still using manual processes can automate salary disbursement through their banking partner.

Remember, after you have processed payroll and you have an excel sheet of how much is due to each employee that month, you must still pay them.

In the old days, companies would write and hand over cheques that employees would then cash out or deposit in their bank accounts. This has now been rightly replaced by more efficient payment methods.

Speaking of payment methods, let's explore how salaries are disbursed.:

What are the payment methods for salary?

A payment method is the way you pay money to the one it is due. In this case, it is the way you pay or disburse salaries to your employees. There are several payment options for salaries that are available to employers in Kenya, which include:


When you pay employees in cash, you do it face-to-face by handing each one of them their net pay for the mont. These are actual cash bills. You can do this in the HR office at the designated managers’ offices.

Paying employees in cash may work well for businesses that generate a lot of cash on their premises. It will save them money in bank fees and helps those employees that do not have bank accounts.

Cash salary payments, however, have disadvantages, too. Because the employee is collecting their full pay in cash and carrying it on them, they risk losing it all if they get robbed. They will also struggle to build any savings because of the urge to spend money if it’s in one’s wallet.

For the business, keeping lots of cash on the premises in the lead-up to payday also exposes it to mismanagement and loss. Paying workers in cash also takes up a lot of time for the responsible people.


We have already touched on cheques as a salary payment method when we highlighted it being on its way out. Safer than getting paid in cash, employees have more control over their spending with cheques as they can control when they want to deposit or cash them out.

If they have a bank account and decide to bank their cheque, employees can also rest easy knowing that the bank will keep it safe. Keeping your money in the bank also encourages savings.

A disadvantage with cheques as a salary payment method is that if the employee takes too long to bank it, they risk it bouncing if the company’s bank account gets overdrawn. And just as cash, handing out and depositing or cashing out cheques takes too much time for everyone involved.

Direct deposits

Direct deposit is when the bank deposits employees’ salaries directly into their bank accounts. This payment method directly credits the employee’s bank account after debiting the employer’s bank account of the net salary amount.

Unlike the previous two payment methods, this one does require the employee to have a bank account.

With the direct deposits, there is no physical exchange of cash or cheques. The salary disbursement happens electronically.

The advantages for direct salary deposits is that the company saves time and can prevent the commotion and hit on productivity as workers excitedly queue for their pay. The workers themselves don’t have to worry about losing their cash or paycheques.

Depending on the tech stack you are using, or the employee’s bank's systems, they may receive a salary disbursement notification on their mobile phone when the salary hits their account.This adds to the convenience of this payment method.

Direct transfers for salaries are faster where the employee uses the same bank as their employees. So it’s not unusual that some employees in the same company can have their salaries available to use in their bank accounts later than others even though they are on the same payroll.

Mobile money wallet

Using mobile money wallets that one only needs an active mobile phone subscription to sign up for, it’s now possible to have your salary paid right into your cell phone, quite literally.

Thanks to the phenomenal success of the M-Pesa mobile wallet, millions of Kenyans now receive their salaries through their mobile wallets. M-Pesa even has features that allow you to save money, shop in-store and online, and pay utility bills with your phone.

M-Pesa and other such mobile wallets are, therefore, arguably the most convenient payment method for salaries right now.

What is to automate salary payment?

Automating salary payment means automatically transferring salaries into recipients’ accounts the moment payroll is approved. The salary disbursement is done digitally - by simply hitting a button.

Automation streamlines salary disbursements, ensuring employees receive their salaries early and safely. It saves time and costs and is convenient for you and your workers.

Once payroll is processed, you should be ready to disburse salaries. The salary disbursement process itself should be straightforward, depending on the payment method you use.

What’s to note is that salary disbursement can be manual and resultantly time-consuming, or streamlined with automation. Salary disbursement automation does not depend on whether payroll itself is automated with software, but it does help immensely if it is.

When you automate salary payment you are making it so salaries are paid directly into employees bank accounts and mobile wallets the moment payroll is approved.

This is usually done by integrating your payroll software with your bank so an instruction is sent to the your bank together with an excel sheet of all employees salary amounts and the bank accounts and mobile wallets their salaries are to be disbursed into.

Intasend simplifies this process by letting you make bulk disbursements from a single request. Your job is to ensure you have a sufficient balance in the business account you maintain with us.

Intasend supports both direct bank deposits and M-Pesa disbursements. So you can have employees who receive their salaries through direct deposits into their bank accounts and those that prefer to get paid through their mobile wallets on the same salary disbursement request.

To disburse salaries, Intasend lets you upload an excel sheet with a list of your employees and their net salaries and payment methods. You can do this through your Intasend account’s dashboard or through the transfer API. You can pay up to 5,000 employees with one request.

Intasend salary disbursements are fast, secure, and PCI-compliant. Request a demo or sign up for an Intasend business account here to automate and streamline your salary disbursements and other business payments.

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