Voiding Direct Deposit Paychecks

Patriot’s Software processes direct deposits in compliance with Nacha rules, ensuring secure and accurate transactions. The ability to stop or refund a direct deposit after voiding depends on the timing of the void and the status of the funds (whether the collection is successful or unconfirmed).

How Direct Deposit Works

1. Collect Funds: Patriot collects payroll funds from your bank account. Even if the debit appears in your bank account, Nacha rules require 1–2 business days to receive the funds before we can confirm the collection was successful.
2. Sending Funds: Once the collection is confirmed, Patriot schedules payments to employees or contractors for the designated pay date.

Timing and Fund Status When Voiding Payroll

Here are some scenarios of timing and refund options:

1. Before the Payroll Collection Deadline

• Timing: Void before 8:00 PM ET the night before your collection date.
• Fund Status:
  • Not Collected: The collection has not yet been initiated, so no funds will be collected from your bank account.
  • What Happens:
    • Employees or contractors will not be paid.
    • In Step 2 of the void process, the Direct Deposit status will show “Not Collected.”

2. After the Payroll Collection Deadline but Before the Pay Date

• Timing: Void after the payroll collection deadline but before 7:00 PM Eastern Time the day before the pay date.
• Fund Status:
  • Unconfirmed Collection: Funds are still in transit and have not been confirmed as received by Patriot.
    • What Happens: Once the collection is confirmed, funds will be refunded to your bank account. Due to Nacha’s processing timelines, it may take a couple of days to appear back in your bank account (or prefund balance if using Prefund direct deposit.)
  • Successful Collection: Patriot has received the funds but has not yet sent them to employee or contractor accounts.
    • What Happens: You have two options:
      1. Retain the Funds: “Keep the funds available to use in future payrolls. See “Applying refunds to prefund a future payroll” below.
      2. Refund to Bank Account: Funds will be returned to your account the next banking day.
• In Step 2 of the void process, the Direct Deposit status will show “Collected.”

3. On or After the Pay Date

• Timing: Void after 7:00 PM Eastern Time the day before the pay date.
• Fund Status:
  • Successful Collection: Funds have already been sent to employee or contractor accounts.
    • What Happens: The direct deposit cannot be stopped.
      💡 We can’t reverse or retrieve funds once they’ve been sent to an employee or contractor’s bank account.
    • You will need to:
      • Arrange repayment with the employee.
      • Deduct the overpaid amount from future paychecks.
• In Step 2 of the void process, the Direct Deposit status will show “Deposited.”

Applying void refunds to prefund to a future payroll 

Here’s the process of using the collected funds have voided a payroll with a successful collection and you want to apply the funds to a future payroll. 

• Select  “Keep funds available for use in future payrolls” 
• Patriot will turn on prefund and add these funds to a prefund balance in your software account.
  • You can view your balance anytime: Settings > Account Settings > Payment Settings > Direct Deposit Settings. 
• The next time you run payroll, the balance in your Prefund will be displayed, and you can choose to use it to fund your payroll.
  • When you have prefunded a payroll, you can run payroll as late as 8:00 p.m. ET the day before the payroll date.
  • The prefund amount must be equal to or greater than the total payroll amount to cover direct deposit transactions.
  • If you run a payroll and don’t use all of the prefund, a new balance will display in your direct deposit settings.

Read our help article, “Using Prefund Direct Deposit” for more information. Also, check out how to run a payroll today for more direct deposit funding options. 

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