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Dec 30, 2025 5:10 PM UTC
Question

Returned payroll deposit

What does it mean when a payroll direct deposit is returned with the reason 'receiving bank not qualified'?

1 reply

Moderator
Dec 30, 2025 5:55 PM UTC

Hello there, @la61.

A payroll direct deposit returned with the reason "receiving bank not qualified" typically means the employee's bank can't process ACH transactions, or the routing number is incorrect. This is often due to the account type, bank restrictions, or setup issues. Verify the bank details with the employee to ensure the account can accept direct deposits, or request an alternative account if needed.

To fix it, you can follow these steps:

  1. Void the paycheck
  2. Update the employee’s bank account
  3. Recreate the paycheck and send a new direct deposit


Feel free to post again if you have clarifications or additional concerns. I'm always here to help!