Understand how employee payment method changes interact with payroll processing deadlines and what happens to the net pay when changes occur after payroll is locked.
Payroll processing is locked at 3:30 PM PST, two business days before the check date. At this point, the system begins generating the NACHA files using the payment method details available at the time of the lock.
Because of this timing, changes to an employee’s payment method after the processing deadline may not affect the current payroll in the way Admins expect.
If there is no direct deposit information on file when payroll locks
If the employee is set to check payment when payroll is locked and they update their payment method to direct deposit after the deadline but before the check date, the change will not apply to the current payroll.
In this case:
The system will not debit the company bank account for the net amount
The net pay remains in the company bank account
The payment method update will apply starting with the next payroll
If direct deposit information exists when payroll locks
If the employee has direct deposit set up when payroll is locked, but they change their payment method to check before the NACHA credit file is generated (3:30 PM PST the night before the check date), the behavior is different.
In this case:
The direct deposit is stopped
The net amount is returned to the company bank account
The employee will need to be paid via check
This timing difference occurs because NACHA files are generated in stages, and certain changes may still be captured before the credit file is finalized.