Setting Up an Employee for Direct Deposit

Shown above is the Payroll Information view of an employee. The employee is set up for direct deposit using the four fields shown near the bottom of the table.

• Direct Deposit Status

  When the status is set to active the employee is paid using direct deposit. Also, when printing direct deposit pay stubs (sometimes called Direct Deposit Pay Advisories) the stub will be printed for the employee.

  When the status is set to inactive the employee is paid using printed-paper paychecks. When processing direct deposit payroll, or when printing direct deposit pay stubs, the employee is skipped. The employee is skipped even if other direct deposit fields have been set.

• Bank Transit, Bank Account, and Transaction Code

  Set these fields to match the information for the employee's designated bank account. You should obtain a sample check from your employee to confirm their banking information, a personal check usually lists the numbers in the order transit number, account number, check number.
  
  Business checks and personal checks vary the order of the above fields. The transit routing number on a paper check is 9 digits. The account number is the set of numbers appearing just after the routing number or to the right of the check sequence number. The account number may contain spaces and symbols, do not type them.
  
  

  The MICR numbers at the bottom of a US Check
  Listed in order as they appear on the check from left to right
  432123456	223334456789	1234
  routing and transit number	account number	check number

  
  Do not pad the bank account number with additional leading or trailing zeros. If 9 digits are printed on the employee's check, enter only the 9 digits, unless instructed otherwise by your company's bank.

If you have filled in the information for any employee in a manner that cannot be processed by your company bank, the entire payroll, i.e. the EFT file transmitted to your bank, may be rejected. You will be notified by your bank, typically within a business day, that the transfer was rejected. The problem is usually addressed by correcting the information for one or more employees, and then re-trying after generating a new EFT file with the corrected information.

Note also that you must set up the company bank account that you use for direct deposit payroll before you can actually transfer funds to employee bank accounts. See Setting up a Bank for EFT.