Adding direct deposit information to an employee bank account

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For live payroll processing only

If you offer a direct deposit option for employee payroll checks, you will need to set up direct deposit information for the employee bank accounts. Once direct deposit information has been set up for the firm bank and the client bank account(s), follow these steps to make employee direct deposit and allocation information available for payroll check printing.

To set up direct deposit information for an employee, follow these steps.

  1. Choose Setup > Employees.
  2. If this employee will have an International ACH format selected on the Direct Deposit tab, be sure that all fields in the Addresses section of the Main tab are completed. Entries in the State and ZIP fields are required only for those countries to which they apply.
  3. Click the Direct Deposit tab.
  4. In the Net Pay Distribution section, specify how much of the employee's pay should be deposited via direct deposit (as opposed to how much should be on a paper check). From the Deposit drop-down list you can select all, a fixed amount, all except a fixed amount, a percentage, or none. Specify the amount or percent if it applies.  Show me.
    Net Pay Distribution
  5. In the Direct Deposit Allocation section, specify how the direct deposit amount is to be allocated to the employee's bank accounts. Note that each employee can have several bank accounts set up. Choose either to base the allocation percentage calculations on the total distribution amount or the remainder of the distribution. Show me.
    Direct Deposit Allocation
  6. If this employee will use International ACH Transactions (IAT), click the Ellipsis Ellipsis button button in the IAT column to open the IAT Details dialog, to specify that this direct deposit allocation uses international format and set up the US gateway operator and destination country information.
  7. Enter the information for one or more bank accounts and specify an amount or percent to be allocated to each. See the Setup Examples section below to view some possible setup scenarios.
  8. For new employees or new direct deposit bank account information, select the Prenote status in the Status column of the grid so that the account information will be prenoted prior to sending live ACH files.

    Note: After the bank account has been successfully prenoted, you will need to manually update the status of the bank account to Approved for direct deposit files to be created. View explanations of each status option.

    • Approved. Everything is setup and this employee's bank account is ready for direct deposit.
    • Needs authorization. Everything is set up, but this employee needs authorization before direct deposit can be processed.
    • Prenote. Everything is set up, but this employee's bank account information will be prenoted before live processing.
    • Suspend. Everything is set up, but this employee is not receiving direct deposit at this time. This option saves the information for when the employee uses direct deposit again.
    • Waiting. The bank account information has been prenoted and we are waiting for the prenote to be approved.
  9. If you want to set up alternate direct deposit allocation information for an employee, mark the Enable alternate direct deposit allocation checkbox and then enter information in the grid. To use the alternate direct deposit allocation, you must use the Actions > Enter Batch Payroll Checks screen and mark the Use alternate direct deposit allocation checkbox on the Edit > Options dialog for the selected payroll schedule.
  10. If the employee is a paycard recipient, mark the Paycard recipient checkbox.
  11. Click Enter to save the employee direct deposit information.

Setup Examples

Scenario #1

An employee always wants $100 deposited into a savings account, and 100% of the balance deposited into a checking account.

Scenario 1

Note: In this scenario, it doesn't matter if Base allocation percentage calculations on is set to Total distribution or Remainder of distribution because the application cannot allocate more than is left over as a result of allocations in previous rows. In this example, if net pay is $1000, and $100 is deposited into savings, then $900 remains. Even though the second row indicates 100% of the total distribution, it will only take 100% of what is left over (in this instance, $900).

Scenario #2

An employee always wants $100 deposited into a savings account, 50% of the remaining amount deposited into a different savings account, and then whatever is left to be deposited into a checking account.

Scenario 2

Note: In this scenario, Base allocation percentage calculations on needs to be set to Remainder of distribution because it is possible that more than 50% of the total distribution is left after the fixed $100 dollars is allocated. So, if the above net pay was $1000, then $900 remains after the $100 fixed amount. Because the Remainder of distribution is marked, the application allocates $450 (half of what's left). If the Total distribution checkbox is marked, then $500 is allocated to the second savings account.

Scenario #3

An employee wants half his check direct deposited in a savings account, and the other half on a paper check.

Scenario 3


  • The Net Pay Distribution section is where you specify how much of the check should be direct deposited (in this instance only 50%). Notice that the percentage in the Direct Deposit Allocation section is set to 100%, because 100% of the amount to be direct deposited needs to go in the one savings account.
  • In this scenario, a payroll check with a partial direct deposit allocation will display in the File > Print Checks screen as one check to print. The check must be printed to send the check information to the Actions > Process Direct Deposit screen.

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