RefTown integrates with PayPal's Payouts service to offer a fast and inexpensive option for paying officials to either PayPal accounts or Venmo accounts.
This service uses 95% of the same functionality as our other financial services that have been available for a long time. The calculations of how much to pay, who to pay it to, and the documentation of what the payment is for have been around since the mid 2000's (with several enhancements along the way). New is the system used to transfer the money.
Requirements:
- First, the official needs either a PayPal or Venmo account.
- Either one works. As a paying administrator, you don't need to know which one an official has...your work is the same either way. The payments are sent to PayPal and PayPal directs the money to either the PayPal account or the Venmo account.
- For your organization to use this service...
- You will need a PayPal business account
- You will need to apply to PayPal to allow “Payouts” (we have setup instructions).
- You enter into RefTown, an account access code to the PayPal account to connect our system with theirs.
- To make payments using this service...
- You transfer your funds into your PayPal account ahead of time. You allow for 3-4 business days for the money to transfer (EFT/ACH like above) or you can wire it same day for a fee from your bank.
- After the game(s), generate invoices to calculate how much is to be paid.
- Direct RefTown to send instructions to PayPal to transfer money to the officials' accounts.
- The money is then instantly transferred form your PayPal account to the official’s PayPal/Venmo account.
Benefits:
- Full RefTown Integration
- Instant Payments
- Money is transferred to officials accounts in seconds where they can
- Inexpensive
- Highest cost scenario is still lower than our lowest cost situation with direct deposit
- Tax Reporting Responsibility moved to PayPal
- According to the IRS documentation, payments made to vendors through payment services like PayPal are reportable by PayPal, not PayPal's customers (you). You would no longer need to issue 1099's to your officials paid using PayOuts.
- From the IRS Instructions:
Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-NEC. See the separate Instructions for Form 1099-K.
Other Notes:
- Can co-exist with other payment options such as direct deposit/
- Officials can transfer the money to their bank accounts/
- Officials can get a PayPal or Venmo debit card to spend the money as soon as it is transferred/
- Officials can use PayPal or Venmo to make purchases wherever those are accepted.