What This Process Does

  • Allows an organization to offer payroll direct deposit to their employees.
  • Submit a direct deposit file electronically to the organization's bank.


Prerequisite: Add/Create Vendor Master

  • Since the Vendor Identification and Address Identification are required fields on the Deduction Description Master Maintain Screen, those fields must be populated on direct deposit deductions, even though those deductions won't flow through to Vendor Withholding; if such a "dummy" vendor does not already exist in your database, you must add one
  • Vendor Payments → task list → Add tab → Add/Create Vendor Master
  • Vendor Payments → task list → Add tab → Add/Create Vendor Master
  • Vendor Name: Enter a name/descriptor for this vendor
  • Address ID: Select REMIT ADDRESS (and leave the remaining address fields blank)
  • Vendor ID:' Can be DIRECT DEPOSIT or DUMMY VENDOR
  • Flags tab: Flag only Active, Payroll Vendor and Default Check Detail


Generic Setup Variables

  • Payroll → Setup → Setup Variables → Generic Setup Variables
  • Flags → Use Prenotification - Must be set to true/on even if only sending a pre-note file once.
  • Checks/Direct Deposits → Transmittal Type - Select appropriate type based on style preferred (choose 8.5x11 RDA Standard to print on plain paper on a laser printer).
  • Checks/Direct Deposits → Direct Deposit Net Type - When set to Normal, the net on the direct deposit transmittals will include all direct deposit types (flat, percentage, and net); When set to Direct Deposit, the net on the transmittal will exclude flat and percentage direct deposit types.
  • Checks/Direct Deposits → Transmittal Number Location – Choose the location of the transmittal number: Upper Right Corner, Lower Left Corner or Not on Form.
  • Checks/Direct Deposits → Low Address on Direct Deposit - Set based on type of transmittal used; If selected will print address lower on transmittal.
  • Checks/Direct Deposits → Direct Deposit Offset – Set based on type of transmittal used; The higher the number entered, the lower the information will print on the transmittal.


Payroll Setup Variables

  • Payroll → Setup → Setup Variables → Payroll Setup Variables
  • Direct Deposit Type – Standard setup: ACH Standard Detail Direct Deposits


Deduction Types

  • Payroll → Setup → Deductions → Deduction Types
  • DIRECT DEP FLAT – Verify this type exists if your organization allows flat amount direct deposits; Should be set as Mandatory Deduction, Computation Level 970 and nothing sheltered.
  • DIRECT DEP PERC – Verify this type exists if your organization allows percentage direct deposits; Should be set as Mandatory Deduction, Computation Level 965 and nothing sheltered.
  • DIRECT DEPOSIT – Standard type used for full or remaining net pay to be direct deposit; Should be set as Mandatory Deduction, Computation Level 975 and nothing sheltered.
  • DIRECT DRAFT-CD, DIRECT DRAFT-CS, DIRECT DRAFT-NS and DIRECT DRAFT-S – Use these types for flat amount direct deposits for Child Support, Credit Union or Tax Sheltered Annuities.


Deduction Descriptions

  • Payroll → Setup → Deductions → Deduction Descriptions
  • A unique Deduction Description ID needs to be set up for Direct Deposits to different banks, i.e. different Transmittal Routing Numbers, and for different Deduction Types (FLAT, PERC or standard Direct Deposit).
    • For example, if several employees bank at Wells Fargo Bank, but some want a flat amount for direct deposit and some want the full net amount, two unique Deduction Description IDs need to be set up even though it is the same bank.
  • In order to group all Direct Deposit deductions together, we suggest starting the Deduction Description ID with DD as well as using the Bank name and transit/routing number in the ID For example, DD-WELLS FARGO 061520002.
  • After creating a unique ID, select the appropriate Deduction Type and Compute Type as follows:
    • Deduction Type = DIRECT DEP FLAT, Compute Type = Flat Amount
    • Deduction Type = DIRECT DEP PERC, Compute Type = Percentage of Adj Gross
    • Deduction Type = DIRECT DEPOSIT, Compute Type = Percentage of Running Net 100
    • Deduction Type = DIRECT DRAFT, Compute Type = Flat Amount
  • The following flags should be true/on for all Direct Deposit Types except Direct Drafts:
    • Active, Reduce Net, Include Base Pay, Include Overtime Pay, Include Supplemental Pay and Block Nothing
    • NOTE: For Direct Drafts only, turn on Expensed and enter deduction account code images
  • The Transmittal Routing Number field must be populated with the correct 9 digit bank routing number of the organization


Employee Deduction

  • Payroll → Other → Benefits / Deductions → Benefits Coordinator (OR) Payroll → Personnel Demographics (select/highlight employee) → Payroll → Deductions
  • Select employee and click on the + to add Direct Deposit Deduction(s) to employee.
  • Add appropriate Direct Deposit deduction based on Bank Routing Number and full or partial deposit.
  • Turn on ACH Active (if NOT sending Pre-Note File).
  • Turn on Checking Account, if applicable, or leave off for Savings Account.
  • Enter employee's Bank Account Number.
  • Mark deduction as active for this employee.
  • NOTE: When adding deductions via Personnel Demographics, when a full net direct deposit deduction has been added for the employee, there is an option to Create Direct Deposit Employee Vendor and REMIT ADDRESS in Vendor Payments. When this process is selected, a Vendor Master will be created with the Vendor ID of Last, First, Middle Initial and last 4 of SSN (DOE, JOHN A. 1234) with the Electronic Transfer info the same as the Direct Deposit info. This enables employees to be reimbursed for expenses via creation of an ACH file through the Vendor Payments module.


ACH Prenotification

  • Payroll → Other → Benefits / Deductions → ACH Prenotification
  • Use this process to create a pre-note file to transmit to bank for verification of accounts.
  • This report will only pull employee files that have an active DD deduction where the ACH boolean is NOT Active.
  • No dollar amounts are included in the pre-note file.
  • Please see related OpenRDA Answers PAYROLL-PREDIRDEPDSK RANGE SCREEN.