Set Up ACH Origination for Payroll Direct Deposit
DynaTax AI generates bank-ready NACHA files for your direct-deposit payroll runs. This guide covers the one-time setup: enabling ACH origination with your bank, entering your company details in payroll settings, and validating everything with a test file before your first real run.
What ACH Origination Is
ACH (Automated Clearing House) origination lets your business send electronic payments directly to your employees' bank accounts. The workflow with DynaTax AI is:
- You run payroll in DynaTax AI as usual.
- For a direct-deposit run, DynaTax AI generates a NACHA file — the standard fixed-width format every US bank accepts for ACH batches.
- You download the file and deliver it to your bank (usually an upload in your bank's business portal), and the bank pays your employees.
Before your bank will accept that file, your account must be enabled for ACH origination — that's the setup below. It is a one-time process that stays active as long as you keep the bank account.
Enable ACH with Your Bank
Every bank runs this a little differently, but the shape is the same:
Contact your bank's treasury or business services team
Tell them you need ACH credit origination for payroll direct deposit. Naming the use case matters — it determines the agreement and limits they set up.
Ask the right questions up front
- Per-transaction and monthly fees for ACH origination
- How they accept files — portal upload, secure file transfer, or another method
- Daily cutoff times, and how many days before payday a file must be submitted
- Any exposure limits on batch totals
Sign the ACH origination agreement
Expect to provide your business EIN, bank account details, and proof of business registration. Ask your bank how long approval takes — it varies by institution.
Collect your NACHA Company ID
Once approved, the bank confirms your NACHA Company ID — the identifier that appears in every file you originate. It is commonly your 10-digit EIN without the hyphen, but always use exactly what your bank gives you.
Configure Payroll Settings
In DynaTax AI, open your payroll settings and complete the company banking section:
- NACHA Company ID (for ACH): derived from your company EIN on file (the EIN without its hyphen). Make sure the EIN in your entity information matches what your bank has on the origination agreement.
- Company bank account: the routing number (9 digits) and account number of the business account your payroll is funded from — the same account your bank enabled for origination.
Send Your Bank a Test File
Many banks ask for a sample file before they turn on live processing, and it's a good idea even when they don't. DynaTax AI can generate a test NACHA file from your payroll settings — it downloads as TEST_NACHA_{date}.txt and uses your real company header information with sample entries, so your bank can confirm the format and your Company ID without moving money.
Send that file through whatever delivery channel your bank set up. Once they confirm it parses cleanly, you're ready for a live run.
Running a Direct-Deposit Payroll
With setup complete, each direct-deposit payroll run produces a NACHA file you can download from the run. Before you hand a file to your bank, DynaTax AI also validates it — checking the record structure, batch totals, and entry hash — so formatting problems are caught on your side rather than as a bank rejection.
- Approve the payroll run in DynaTax AI.
- Download the run's NACHA file.
- Deliver it to your bank before their cutoff time for your payday.
Frequently Asked Questions
Can I run payroll without ACH setup?
Yes. You can still calculate payroll and pay employees by paper check or your own transfers — ACH origination is only required for direct deposit through NACHA files.
What does ACH origination cost?
Fees are set by your bank, not by DynaTax AI, and vary widely by institution and account type — some charge per transaction, some add a monthly service fee, some include it with business checking. Ask your bank's treasury team for their current schedule.
What if my bank rejects a NACHA file?
DynaTax AI validates files before download, so rejections are usually a mismatch in account setup — a Company ID that differs from the origination agreement, or a bank that requires a specific delivery method. Confirm those details with your bank, and contact DynaTax AI support if the file itself is being questioned.
Do I need to repeat this setup every year?
No. ACH origination stays active as long as you maintain the business bank account and the agreement with your bank.