Using Prefunded Direct Deposit

Background

Prefunding payroll means setting aside money in advance to cover employee direct deposits. Instead of waiting until payroll is processed to collect funds, the money is collected ahead of time and held until payroll is run. This allows faster processing, so employees can be paid as quickly as the next business day.

For other payroll funding options check out “Run Payroll Today: Prefunding with Bank Wire or Instant Payments,” and  “Wire Instructions for Patriot Software Direct Deposit.”

How to Set Up and Manage Prefunding Balances

1. Go to Settings > Account Settings > Payment Settings > Direct Deposit Settings.
2. Click “Set Up Prefund.”
3. Choose between auto-replenishment or manual funding:
   • Option 1: Auto-Replenishment: Use this when you want Patriot to collect money from your account to always have a balance on hand. You’ll have up until 8:00 p.m. ET the day before your pay date to process your payroll.
     • Enter a target balance by estimating the amount needed for each payroll to cover total employee net pay. You may want to go 10-20% higher as a buffer. There’s no cap on your prefund balance.
     • Click “Enable Prefund.”
     • When you run a prefunded payroll with a target balance, Patriot will automatically collect the same amount as your direct deposit total to replenish your balance on the pay date. This replenished amount will be available for use three banking days later.
   • Option 2: Manual Funding: Use this when you want to process your payroll with direct deposit immediately upon the funds being applied. Run your payroll by 8:00 pm. ET up until the day before the pay date.
     • Do not set a target balance.
     • Click “Enable Prefund.”
     • Download wire transfer instructions or instant payment instructions, which include our bank details and a unique reference number.
     • Next, estimate the amount needed for your payroll to cover total employee net pay. You may want to go 10-20% higher as a buffer.
     • Send the amount to Patriot including your prefund code in the Originator-to-Beneficiary Instructions (wire) or Description/Memo (Instant Payment) to ensure the funds can be applied to your balance quickly. Once we receive the funds, you can process your payroll immediately. You will receive a confirmation email. 

Adjusting Your Prefund Target Balance

Go to Direct Deposit Settings and click “Edit Auto-Replenishment.”

• Decrease Target Balance: Patriot will not issue a refund. The balance will be used in future payrolls until it falls below the new target.
• Increase Target Balance: The additional amount will be withdrawn the next banking day and available three banking days later.

How to Quickly Increase Your Prefund Balance

You can send bank wires or Instant Payments through the RTP (Real Time Payment) Network. Here’s how it works:

• Settings > Account Settings > Payment Settings > Direct Deposit Settings
• Scroll to the Prefund section
• Download either the wire transfer or instant payment instructions.
• Send the funds.
  • Funds must be received 7:00 ET the day before your payroll run.
  • We’ll apply the funds to your prefund balance as soon as we receive them.

Disabling Prefund for One Payroll Run

• Go to Payroll > Run Payroll.
• Locate the Direct Deposit and Prefund toggles under the pay period or pay schedule.
  • If your direct deposit is disabled, the Prefund option will be disabled by default and the Prefund toggle will not be displayed.
• Click the radio button under Prefund from “Enabled” to “Disabled.”

Important notes

• Prefunding will automatically re-enable for the next payroll if you have set a target balance.
• When disabling the Prefund option but NOT disabling direct deposit, the payroll will use the normal direct deposit with your allowed ACH timing.
• When disabling Direct deposit, the Prefund option will be disabled by default will not be displayed.

How to Stop Using Prefund and Refund Your Balance

1. Go to Settings > Account Settings > Payment Settings > Direct Deposit Settings.
2. Request a refund of your prefund balance
   • If you have a balance, you will recieve a confirmation message. Click “Yes, Cancel Prefund” to confirm.
     • Confirm with “Yes, Cancel Prefund.”
     • Your target balance will be set to zero, and any remaining amount in your prefund will be returned the next banking day.
   • If no balance exists, you will receive a cancellation confirmation that no additional funds will be collected.
     • Confirm with “Yes, Cancel Prefund.”
     • Your target balance will be set to zero and will not recollect for future payroll funding.
   • For pending prefund collections not yet settled, contact Support after settlement for a refund.

Was this article helpful? *

• Yes
• No

Comments:

Submit

Your feedback will not receive a reply. If you have a specific issue, please reach out to our support team here.