A direct deposit authorization form is how an employee tells payroll where to send their pay electronically. It is also the form fraudsters most like to fake, so how changes are confirmed matters.
| Field | Why |
|---|---|
| Employee name and ID | Matches the payroll record |
| Bank, routing and account number, account type | Where the money goes |
| Split instructions | Amount or percentage for each account |
| Authorization and signature with date | Consent to deposit and to correct errors |
| How changes are confirmed | Protects against fraudulent change requests |
For how direct deposit works in payroll, see direct deposit.
A payroll clerk at a cleaning company gets an email from what looks like a supervisor’s personal address, asking to change his direct deposit to a new bank “before Friday”. It attaches a filled-in authorization form.
The company’s procedure says account changes are accepted only through the employee’s own login, signed electronically, or confirmed by a call to the phone number already on file. The clerk calls the supervisor, who never sent the email. The paycheck that would have been diverted was $1,640.
The company reminds all staff that it will never ask for bank changes by email and that changes must come through their own account. The real supervisor’s pay arrives on time.
Payroll systems usually need the authorization a few days before payroll is processed, so set a cutoff and tell employees: changes received by the cutoff take effect on the next payday, anything later on the one after. Until the new account is active, the employee is paid by the previous method, which avoids a missed payday.
Splits need a clear rule for what happens when pay is lower than expected. A common setup sends a fixed amount to a savings account and the remainder to the main account. If a short week means pay is below the fixed amount, the form should say which account receives what is available. Stating the rule on the form prevents surprises in a short week.
A hotel housekeeper sends $150 of each paycheck to savings and the rest to checking. Her usual net pay is $720. In a week with a holiday closure, her net pay is $380.
Because the form says the fixed amount goes first and the remainder second, $150 goes to savings and $230 to checking. She had planned rent from checking, so she changes the split to 10% of net pay instead, effective the next payday after the cutoff.
Employee details, bank name, routing and account numbers, account type, any split instructions, and a dated signature.
It depends on state law. Federal rules do not allow requiring an account at a particular bank as a condition of employment.
Often one or two pay cycles, depending on the payroll provider. Tell employees when the new account will start.
Accept changes only through the employee’s own account or confirm by calling a number already on file, never a number in the request.
Many payroll systems allow it. The form should state the amount or percentage for each account and which account gets the remainder.
The deposit is usually returned, which can delay pay. Check details carefully and confirm the first deposit with the employee.
EZTime turns clock-ins and approved corrections into signed monthly reports you can export to PDF or Excel for payroll.