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Direct Deposit

Direct Deposit

A method of payment whereby the employee authorizes payment of his/her paycheck directly into a specified bank account.  This method is generally more efficient for both the employee and employer.  For the employee, they no longer have to make a trip to their banking instution to deposit a paycheck.  They also no longer need to wait for the paper check funds to actually clear the bank.  This is called float.

From an employer perspective, employees no longer need to take time away from work to make a deposit.  Employers also no longer need to worry about lost or misplaced checks creating a fraud risk.  Employees that work remotely are much easier to pay and their pay can be placed in the correct account on the payday without worrying about mailing or other shipping timing and costs.

Employee authorization must be granted prior to a direct deposit payment.  Certain states allow direct deposit to be mandated as a condition of employment.  If the employee has no bank account, other paperless payroll options like pay cards are available as well. is a free online resource featuring a compilation of research, collaboration and web tools for use by payroll professionals and more including information about payroll tax articles, federal tax information and state tax information.

Helpful Hint... Anytime you move or have a major life change (for example - marriage, divorce, birth of a child, etc.) always be sure to complete a new W-4!