Generate Yield on Payroll Treasuries

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Payroll is the most important bill that any company has to pay. And it's usually the most expensive bill that any company has to pay. 

In the U.S., payroll underpins social services, tax systems, healthcare, and more, flowing through complex employer back-office operations. Yet, despite its importance, payroll treasury management has remained stagnant, relying on outdated, inefficient methods that lock up capital and erode value. 

Traditional approaches like pre-funding payroll accounts, tranche loans, or earned wage access programs are riddled with flaws — high costs, idle funds, and operational friction.

Enter Payroll Treasury Yield by Franklin — a strategy leveraging blockchain-based lending protocols to transform payroll into a revenue-generating asset. Below, we’ll explore how Payroll Treasury Yield offers superior returns and flexibility compared to legacy methods, revolutionizing how companies manage their payroll treasuries.

The High Cost of Traditional Payroll Liquidity Management

Managing payroll liquidity is a balancing act. Companies must ensure funds are available on payday, in the right currency, and in the right place for ACH or wire transfers. Missing a payroll deadline risks employee morale, reputational damage, and legal penalties. To mitigate this, businesses typically rely on two strategies, both of which are costly and inefficient:

1. Pre-Funding Payroll Accounts: The Capital Trap

The most common approach is pre-funding payroll accounts, where companies set aside wages, taxes, and benefits well in advance of payday. This ensures operational reliability but comes at a steep cost: capital inefficiency. Funds sit idle in low- or no-interest-bearing accounts, generating minimal returns. 

Some CFOs attempt to optimize by parking funds in overnight sweep accounts or Treasury bills aligned with payroll cycles. However, these options yield paltry returns and require complex maturity matching with payroll cycles. The operational overhead of managing these instruments often outweighs the marginal gains, leaving treasuries underutilized.

2. Tranche Loans and Earned Wage Access: The Debt Burden

The second strategy involves borrowing to fund payroll, either through tranche loans or earned wage access (EWA) programs. These are often used by companies facing cash flow timing mismatches or seeking to offload internal treasury management. However, both options are expensive and risky.

Tranche loans often charge interest rates exceeding 7-10%, which eats into margins. Meanwhile, EWA programs are marketed as employee-friendly, but are essentially debt tools with platform fees and high interest rates. These programs also introduce reconciliation risks — and errors or adjustments during payroll runs can lead to costly disputes or penalties. 

Both strategies (pre-funding and borrowing) tie up capital, incur opportunity costs, and expose companies to financial and operational risks. There’s a better way.

Payroll Treasury Yield: A Blockchain-Powered Revolution

Franklin, a leader in crypto payroll solutions, is redefining treasury management with Payroll Treasury Yield. By integrating blockchain-based lending protocols like Summer.fi, Franklin enables companies to earn high yields on payroll funds without sacrificing liquidity or custody. This approach leverages the speed, transparency, and efficiency of smart contracts to deliver a step-function improvement over traditional methods.

How It Works

Franklin’s platform already offers just-in-time payroll funding using stablecoins, eliminating the delays and costs of traditional banking rails. With the Summer.fi integration, companies can now allocate their stablecoin payroll reserves to earn yield. 

The process is seamless:

• Deposit: Companies allocate stablecoin payroll funds to earn yield. 

• Earn Yield: Funds are lent to vetted borrowers via audited smart contracts, generating competitive returns.

• Withdraw: Companies retain full custody and can withdraw funds anytime to meet payroll deadlines.

Why It’s Superior

Payroll Treasury Yield addresses the flaws of traditional methods head-on:

• Higher Returns: DeFi protocols consistently outperform low-yield bank accounts and T-bills. In 2025, stablecoin lending yields average 6-8%, compared to 0-1% for checking accounts and 4-5% for T-bills.

• Liquidity: Unlike pre-funding, where capital is locked until payday, DeFi platforms allow instant withdrawals, ensuring funds are available when needed.

• Cost Efficiency: Borrowing-based solutions like EWA incur high fees and interest. DeFi lending has minimal fees and no intermediaries.

• Transparency and Control: Smart contracts are audited and operate on public blockchains, reducing reconciliation risks. 

• Simplicity: Franklin’s user-friendly interface enables yield generation in three clicks, eliminating the operational complexity of T-bill ladders or sweep accounts.

Real-World Impact

Consider a mid-sized company with a $1 million monthly payroll. Pre-funding ties up $1 million in a 0.5% interest account, yielding $5,000 annually. T-bills might generate $50,000 at 5%. In contrast, allocating funds to a DeFi protocol at 7% yields $70,000 annually, with no loss of liquidity. For larger enterprises, the savings scale exponentially.

Addressing Risks

DeFi isn’t without risks—smart contract vulnerabilities and market volatility are concerns. However, Franklin mitigates these by partnering with battle-tested protocols like Summer.fi, which use audited contracts and over-collateralized lending. Compared to the systemic risks of EWA reconciliation errors or tranche loan defaults, DeFi’s risks are manageable and transparent.

The Future of Payroll Treasury Management

Payroll isn’t just about paying employees on time — it’s a strategic lever for capital efficiency and financial agility. As CFOs face pressure to optimize cash reserves in a high-interest-rate environment, Payroll Treasury Yield by Franklin offers a compelling solution. By modernizing treasury management, companies can unlock higher returns, reduce costs, and maintain operational flexibility.

Franklin’s integration of blockchain-based yield generation marks a turning point. Pre-funding and borrowing are relics of a legacy system, burdened by inefficiency and expense. Payroll Treasury Yield is the future — a smarter, more profitable way to manage the heart of your business.




Note: Why We Chose Summer.fi As Our First Integration Partner
The Summer.fi team has a wealth of experience dating back to the MakerDAO days building vaults. We integrated with them initially because:

• Their vaults aligned with the kinds of assets our customers are already using

• The Risk Curator they have implemented prevents exposure to any one protocol or collateral paired assets

• Frequent rebalancing

• Sophisticated APIs

From their CTO, Andrei David: "At Summer.fi, we believe DeFi should meet users where they already are. That's why we're thrilled to see Franklin Payroll launch the yield-earning product using our new SDK - giving their customers seamless access to the most competitive AI-optimized onchain yields. Collaborating with visionary teams like Franklin, who share our mission to simplify DeFi access, has been instrumental in refining our SDK. We're excited to support their continued growth and the broader adoption of the Lazy Summer Protocol."