Direct Deposit Payroll is depositing earlier into employee bank accounts

Thank you for reaching us here in the Community, @Donna. I'll be happy to clarify things for you.

A direct deposit system electronically deposits employee wages into their bank accounts from your payroll funds. 

Intuit receives requests and funds and then deposits the funds into your employee's bank account. Then it is the bank that determines when to post your employee's pay.

You can visit this article to know how how to make sure your employees get paid on time when there’s a holiday: How do federal holidays affect my direct deposit?

Don't hesitate to post here if you have any further concerns about your direct deposits. Have a great day!

Yes, this is normal and happens regularly.

The reason is that within the ACH banking system, when orders are sent, the dates on them are basically just a suggestion. When a bank receives an ACH order, they have the money and the account is designated, and there's a date as well.

However, if they get the order late, they naturally can't comply with the date, and if they get it early, they are free to post the money to the account early.  Some banks do, and some banks don't.

Generally, Intuit sends the ACH orders to pay one or two days before the payroll date, with the payroll date as the date for the order. Some banks will post the money more or less in real time (they continually update accounts all day long, perhaps) and others will wait longer. And there's no way to control what they do.

This is not a correct way to handle business. Banks should all comply with the pay date listed and should not deposit any paychecks earlier. If anyone went to a bank and said please cash this check for me and I'll give you the money for the check tomorrow. They wouldn't do it. So why should they pay my employees a day early when I specifically set a date for them to receive their paycheck. It's just not a correct way to handle this. 

@PBOV15 

RE: This is not a correct way to handle business. Banks should all comply with the pay date listed and should not deposit any paychecks earlier.

Well, I can see why you'd think that, but rather surprisingly, that isn't how ACH works.

As is happens, when the bank, the originator, sends an ACH batch and orders into the ACH system, the batch includes two dates, the Company Descriptive Date and the Effective Entry Date. These dates are suggestions as to when the money should appear in the receiving bank account, but they're only suggestions. Banks can move the money earlier if they feel like it, and also be late - which often happens of the orders aren't sent in time and for very small banks where the process is partially manual. I think the banks technically have up to 7 days from receipt of the orders to deal with them - it just happens that they routinely do it faster.