If you recently received an offer or a new position for work, your employer may request banking information to send your paycheck to you.
Direct deposit issues automated electronic payments that are directly transferred to a recipient’s bank account. It eliminates the need for an employer to hand or mail physical checks, and for the employee to have to visit a bank to deposit a physical check into their account.
For example, employees enrolled in direct deposit, working a salaried position, can expect to receive their paycheck at the end of each payroll period. If their payroll period ends on the 15th and last day of the month, they can expect to receive their paycheck(s) then. Prior to the pay period ending, the company sends payroll instructions to its bank. The bank sends that information to the Automated Clearing House (ACH), which handles electronic funds transfers. After the ACH operator confirms that the transfer is routed to the correct account, the employee’s bank account with be credited with the appropriate funds.
How to setup direct deposit
When you want to set up direct deposit through your job, you should:
- Fill out a direct deposit form from employer. During the onboarding process, your employer will provide a direct deposit form. If they don’t, request one. The form will ask you for your name, address, and signature for direct deposit. In addition to these details, it will also request your banking information, specifically your routing and account numbers. Double check that the account information you provide is correct, or else you won’t be able to initiate your direct deposit.
- Verify the deposit amount. You can opt to receive your full paycheck each pay period or change the amount you wish to deposit in one account. If you want to proactively manage your savings, you can have a percentage of your direct deposit go into your checking account and the remainder in your savings account.
- Attach a voided check. Some employers may also request a voided check to confirm that the bank account information is correct.
- Submit the form. Complete a final check-through of your direct deposit form to ensure your information is correct. If you work in an office, hand your direct deposit form to your payroll department.
Other uses for direct deposit
In addition to receiving payment from your employer, there are other reasons you may use direct deposit. Other uses for direct deposit include:
- Tax return: The CRA allows taxpayers to sign up for direct deposit to receive their tax refund. Instead of waiting for your refund to get mailed, your refund can be sent directly to your bank account! In addition to your tax refund, you can also receive workers benefits, child benefits, goods and services taxes, and other provincial and territorial payments. To sign up for direct deposit, visit the CRA website, register an account, and update your direct deposit information online or by phone.
- Government payments: You can also use direct deposit to receive other government payments such as pension, old age security, and employment insurance payments.
- Bill pay: Certain vendors and reoccurring bills allow you set up bill pay and automate transactions with direct deposit. There is usually a “bill pay” option with your banking institution to automate bill payments.
Send money with Western Union
Set up your direct deposit information to automate payments from your employer. After you receive your direct deposit, you can send and receive money from your bank account with our Western Union money transfer app or website. If you prefer to schedule transfers in person, visit our website to find a nearby agent location.
