Direct deposit systems are the go-to method for companies to pay their employees. This is a process where instead of handing out physical paychecks, companies electronically transfer the money directly into their employee’s bank accounts.
Due to its convenience, this method of transferring funds is offered on several platforms including Paylocity. However, if you’ve never set it up before, the whole process may seem a little daunting.
Thus, we’ve come up with a step-by-step guide that walks you through the whole process. Read more below to learn how to set up direct deposit on Paylocity.
Before you can set up a direct deposit for your employees, you’ll need a couple of things such as:
- A company bank account
- Employees’ routing numbers and bank account numbers
- Employee permissions to use direct deposits
Step 1: Connect With Your Bank
The first step is to set up the direct deposit through your bank. The process may vary—you’ll either have to fill out some necessary paperwork like an ACH terms and conditions form or be asked to provide financial statements for clarity. You may also be asked to sign off a small test deposit.
Step 2: Gather Information From Employees
Once your deposit is set up, it’s time to collect all necessary information from the employees such as their bank account numbers, bank names, etc. This not only ensures that the business can onboard employees quickly but also makes sure that all information is up to date and that any changes can be accounted for.
Step 3: Create And Run Payroll
Use the information provided by the employees to create a payroll schedule. It’s important to set it up before the first payroll date so that operations can proceed smoothly.
When the direct deposit has been activated from the bank’s end (it normally takes around 10 days), then it’s time to run the payroll with it.
Once you’ve run the payroll, that’s the end of it—you've directly deposited money into all your employee’s accounts. Well done!
Since it’s the first time you’re running payroll, it’s important to ensure that everyone receives their payroll on time. If someone’s payroll hasn’t been processed properly, try reaching out to Paylocity for help.