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 ID, Bank Transit, and Bank Account

  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, but note that the information at the bottom of the check lists the numbers in the order check number, branch or transit number, Bank ID number, account number.
  
  The Bank ID number on a paper check is usually 3 digits. When the Bank ID is used for EFT you must add a leading zero. For example, if your employee's check has 004 printed as the Bank ID, you must enter 0004 on line 23 of the employee's Payroll Information table.
  
  

  The MICR numbers at the bottom of a Canadian Cheque
  Listed in order as they appear on the cheque from left to right
  4444	02221	0004	5505 0503213
  cheque number	branch / transit number	bank number	account number

  
  Do not pad the bank account number with additional leading or trailing zeros. If 8 digits are printed on the employee's check, enter only the 8 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 an hour, 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 that although the company bank account that you use as the source of the direct deposits is restricted to the five Canadian banks currently supported, an employee can use almost any financial institution in Canada, including almost any bank, trust company, or credit union.

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.