Electronic Fund Transfer - EFT

Overview

Electronic Fund Transfer (EFT) provides a means for employee earnings to be directly deposited (via magnetic tape) into their bank accounts. Employees who participate in this process may deposit their earnings into multiple checking and savings accounts. The EFT module produces a magnetic tape in the format specified by NACHA (National Automated Clearing House Association) and a listing of the transactions that are on the tape.

The system treats direct deposit amounts as deductions taken from employee earnings. Employee net pay, kept in the Net Pay Base, is reduced according to the amount specified by the employee. If the EFT deduction reduces the Net Pay Base to zero, the employee receives either a void check with a valid check stub, or an EFT stub. If the employee has Net Pay remaining in the Net Pay Base after the EFT deduction, a check will be printed for that employee and the EFT information will be included on the stub.

Initial Setup

When an employer is initially setting up EFT with their bank, a test tape which contains only pre-notes must be generated. The following six steps outline this procedure.

1. Deduction Definition: Access the Deduction Definition (PYUPDD) page. To accommodate employees with multiple accounts, multiple deduction definitions must be created for each type of EFT deduction that will be utilized. Each EFT deduction definition should contain EFT in the first Miscellaneous Code on the Deduction Definition page.
   The priority on the Deduction Definition page should be higher than all other CDHs that have an effect on the Net Pay Base. Typically, EFT deductions are in the 9000-9999 range of priorities.
   On the Deduction Definition page, enter the Calculation Formula for the EFT Deduction.

2. Common Code Setup: Set up the PYEF/TAPE01, PYEF/TAPE02, PYEF/TAPE03 and/or PYEF/TAPE06 common codes. If intermediate calculation and debug information are to be displayed, set up common code PYFG/PY604C. Some banks may require custom file headers. Common codes PYEF/TAPE07, PYEF/TAPE08 and PYEF/TAPE09 are reserved for this purpose.

3. Designate Test Mode: In the PYEF/TAPE01 common code, enter TEST in the Short Description field.

4. Designate Employee Bank Accounts: To identify bank and bank account information for employees, enter the appropriate information on the CDH Assignment. The checking/savings flag is in the short misc field, the Transit Number is in the medium misc. field and the Account number is in the long misc. field. These fields are accessible via the EFT or CDH assignment pages.

5. Complete Test: After payroll has been processed and the test EFT tape has been approved by the bank, remove TEST from the Short Description field in the PYEF/TAPE01 common code.

6. Deduction Assignment: The EFT deduction assignment entries are used to tell the system how an employee would like to handle net earnings in the form of direct deposits. An employee may designate multiple direct deposits with different types of calculations. Each direct deposit assignment, which is to occur concurrently with other assignments, must have a unique deduction number.

The initial set-up process is now complete. The next time that payroll is run (PYPADP), EFT will be processed.

Adding an Employee to Direct Deposit (Prenote)

When an employee is initially added to direct deposit EFT, the bank will require that the first tape they receive for an employee contains only pre-note information and that no earnings be transferred for that employee. Until the bank confirms that the setup information in the employee pre-note is correct, no earnings may be transferred. The following steps outline the procedure for adding a new employee:

1. Designate Employee Bank Accounts in Test EFT mode. Select the Test EFT box on the HR Pay Related Assignments (HRPYPR) page, Direct Deposit tab. Test EFT indicates that the next payroll run will test the direct deposit EFT for this employee and that no money will be transferred.

2. Deduction Assignment. Deduction assignment entries are used to tell the system how an employee would like to handle net earnings in the form of direct deposits. An employee may designate multiple direct deposits with different types of calculations as defined.

3. Test complete.

After running PYPADP, the Test Note check box is automatically unchecked.

Suppress EFT printing

When Switch 05 (Suppress EFT Prt) on the Employee Definition (PYUPEM) page, Switches tab, is set to Y, no Direct Deposit statement will be printed for that employee during a Distribute and Pay (PYPADP) run. The switch is ignored during the Trial Payroll (PYTPDP) process.
Associated Code 1 on common code PYFG/660EFOUT can be set to NULL to suppress the printing of all EFT statements. In that case, common code NULP/NULL needs to be defined. Correct NULP/NULL definition requires ^$NULL in Long Desc field.

Transferring EFT Data

There are two methods used to transfer EFT Data. The first method assumes that the EFT data was written to disk during the Payroll Process; then, the data will be either transferred to tape or transmitted via modem. The second method assumes that the EFT data will be written to the tape during the Payroll Process.

EFT Data Written To DISK During the Payroll Process

This method assumes that the EFT data is written to disk during the Payroll Distribute and Pay Process. All EFT common codes must have been previously configured and the EFT-related common code (PYEF/TAPE02) MUST be set up for writing to disk. Copy the EFT data file to a tape or transmit the data via modem according to operating system procedures.

EFT Data Is Written To TAPE After the Payroll Process

Mask PYREPAEF will produce a report as well as the EFT file. Mask PYRESPEF will produce the report only.

MPE Operating System

This method assumes that the EFT data will be written to the tape during the Payroll Distribute and Pay Process. If the EFT tape needs to be recreated, refer to the Reports Section of this guide for information on using PYREPAEF to create another tape. If more than one EFT file was created and these files need to be merged together before creating the EFT tape, use the Merge EFT Files utility (PYUTME). All EFT common codes must have been previously configured and the Associated Code (5) of the PYEF/TAPE02 common code must be blank.