Direct deposit, in plain English.

How Direct deposit works.

Direct deposit moves net pay electronically into an employee bank account through the national clearing system, on a file submitted ahead of the pay date. Every country sets its own file format, lead time, and recall rules, and that lead time is what constrains the payroll calendar. Once a file is submitted, fixing an error usually means a reversal request rather than an edit.

Where Direct deposit goes wrong.

• Bank detail changes accepted after the file cut-off, so pay lands in a closed account.
• No pre-note or validation step, so a wrong account number surfaces only when the payment fails.
• Payroll calendars built without the clearing lead time, leaving no margin for a failed submission.

Where Direct deposit sits between HR and payroll.

Direct deposit does not stand alone. The concepts most often paired with it on a Payroll run are Payroll processing, Pay stub. Each is defined elsewhere in this glossary so you can trace the full chain without leaving the site.