Available on: Patriot Payroll (Basic and Full Service).
Direct deposit is a payment method that electronically transfers employee or contractor pay directly into their bank accounts using ACH (Automated Clearing House), the banking network that processes electronic fund transfers between financial institutions in the United States. Direct deposit eliminates the need to print and distribute paper checks.
Before you can use direct deposit in Patriot, you must apply and be approved by Patriot's risk assessment team. This is required by KYC (Know Your Customer) regulations — federal rules under the USA PATRIOT Act that require financial institutions to verify the identity of their customers before processing transactions on their behalf.
Important timing note: Every new direct deposit customer starts with 4 day ACH timing — meaning you must run and approve payroll four banking days before the employee pay date. If you miss the ACH deadline, you can also fund direct deposit via bank wire or instant payment (as late as one banking day before the pay date). See Direct Deposit Funding and Timing Options for details.
After you have a pattern of successful collections, you can contact our team to have your account evaluated for expedited 2-day direct deposit.
How to Apply for Direct Deposit
All customers must apply for direct deposit and receive approval before using it. You can apply during the payroll setup wizard, or afterward at Settings > Payment Settings > Direct Deposit Settings.
Step 1: Verify the Business Owner's Identity
Enter the personal information of the business owner or authorized officer. Patriot uses this to verify your identity as required by KYC rules.
You will need to provide:
Business owner's full name
Business owner's current home address
Business owner's Social Security Number
Business owner's date of birth
Business owner's government-issued ID (such as a driver's license)
If you are already a Full Service Payroll customer and have completed identity verification for tax filing purposes, you will skip this step — it only needs to be completed once.
If identity verification fails, see the help article "Failed Identity Verification."
Step 2: Enter Additional Company Information
Enter your business NAICS code — a 6-digit number assigned by the federal government that identifies your industry (for example, 722511 for full-service restaurants). You can look up your code at naics.com. You may also provide a written description of your business instead of or in addition to the code.
Enter your business website address, if you have one.
Confirm that the contact information on file is correct.
Add additional authorized contacts if others at your business are permitted to discuss direct deposit matters with Patriot Support.
Step 3: Verify Your Business Bank Account
You must use a commercial (business) bank account for direct deposit. Personal bank accounts cannot be used.
Patriot uses Plaid (a third-party bank account verification service) to instantly verify your bank account. If you are already a Full Service Payroll customer and have verified your bank account for tax payments, you will skip this step — the same bank account is used for both direct deposit and tax payments.
If your bank does not support instant verification through Plaid, Patriot will make two small test deposits (a few cents) to your account. You will need to confirm the exact amounts to complete verification. If the bank statement does not display the account type, a signed letter or email from the bank confirming these details is required.
Step 4: Upload Documents
Required: A copy of your commercial bank account statement. The statement must show the account is a business or commercial account. Personal bank statements are not accepted.
If you do not have a bank statement available, you may submit a letter from your bank on bank letterhead. Alternatively, a banker can email the required details directly to the designated direct deposit verification email address. The letter must include:
Bank name
Company name or owner's name
Account type and account number
Date
Name and phone number of the banker signing the letter
When a Business name with bank account has changed
If the business name associated with the bank account has changed, you must provide a verified letter from a bank representative confirming the account is a business/commercial account, the business name, the account number (at least the last four digits), the first and last name of the account owner, the name and phone number of the bank representative, and the banker's signature. Alternatively, the banker can email these details directly.
Occasionally required: Proof of Federal EIN. If Patriot's identity verification tools cannot confirm your 9-digit Federal Employer Identification Number (EIN), you may be asked to upload a document confirming it (such as your IRS EIN confirmation letter).
In some cases, Patriot Software may require a bank letter even if a bank statement appears to show the necessary details. This is part of enhanced due diligence and compliance procedures to independently verify account details. Once this review path is triggered, the requirement cannot be waived or substituted with other documents.
Step 5: Application Acknowledgement
Check the acknowledgment box to confirm you are authorized to submit the application on behalf of your business, then submit.
Patriot's underwriting team will review your application within 10 business days, though approvals typically happen sooner. Questions? Email [email protected].
After You Have Been Approved for Direct Deposit
Complete these steps before running your first payroll with direct deposit:
Turn on direct deposit. The next time you log in after approval, Patriot will prompt you: "Would you like to turn the direct deposit on?" Click Yes. This changes your payment method from Paper Checks to Direct Deposit.
Add employee or contractor bank account information. Each employee and contractor who will be paid by direct deposit needs their banking information entered in Patriot before payroll is run. You can add this yourself, or employees and contractors can enter their own banking information through the Employee Portal or Contractor Portal.
See these help articles for more information.
Important Notes
Direct deposit cannot be added retroactively. If you run a payroll before entering an employee's banking information, that payroll will not be converted to direct deposit. To correct it, you must void the paycheck and reprocess it with a future pay date. See "How to Void a Paycheck in Patriot Payroll."
You must use a commercial bank account. Personal bank accounts are not eligible for direct deposit in Patriot, regardless of the account balance or bank.
ACH has a four-day lead time. Standard direct deposit requires approving payroll four banking days before the pay date. If you miss this window, you can use a bank wire (deadline: approve payroll and initiate wire by 3:00 p.m. ET the day before the pay date) or instant payment (same deadline). See Wire & Instant Payments | Fund Direct Deposit.
Both employees and contractors require separate bank information setup. Approving direct deposit for the company does not automatically enroll employees or contractors — each person's banking information must be entered individually.
Bank account numbers are redacted for security. Patriot Software redacts bank account numbers to the last two digits in both admin and contractor views. Support cannot view or disclose full account numbers to ensure privacy and security.