Payee definition
/What is a Payee?
A payee is a person or entity that receives or is scheduled to receive a payment. The payee is usually entitled to a payment because it has provided goods or services to the payer. Other reasons for the receipt of payment are when the payee is receiving a donation, a grant, or a tax payment. The person or entity making the payment is the payer.
Payments to a Payee
A payment to a payee may be in any form, including bills, coins, a check , an electronic transfer, a promissory note, or in kind. For example, the payer may promise to provide tax filing services to the payee in exchange for the settlement of a debt.
Examples of Payees
Here are several examples of payees:
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Supplier . This party receives payments for raw materials, goods, or services provided.
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Employee . This party receives wages or salaries as part of payroll.
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Contractor . This party receives payment for specific projects or tasks.
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Tax authority . This party receives tax payments from the business.
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Insurer . This party receives premium payments for policies.
Each payee is the recipient of funds, whether for a transaction, obligation, or service rendered.
When are the Payer and Payee the Same?
The payer and the payee may be the same party. This situation usually arises when a person wants to transfer funds from one account to another, and does so by writing a check to himself from one account and depositing it in another account.
