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Direct Deposit Definition

November 10, 2015

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Term Definition
The electronic transfer of an employee’s net pay into their bank account.

Extended Definition
Employers can offer employees the option of direct deposit for their payroll, giving employees a paperless way to receive their pay. The process requires initial paperwork and a means to transmit the payment to the employee’s bank account with each payroll run. There are federal (and sometimes state) laws that specify the direct deposit requirements for employers.

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