This article applies to Payroll by Wave in Canada. If your business is located in the US, you may find this guide more helpful.
Direct deposit means your employees can get paid automatically, and you won't have to write any cheques. If you want Wave to remit taxes to the CRA on your behalf, direct deposit allows us to pay your remittances for you. This process doesn't cost anything extra; it's included in the payroll base fee.
There are two things you need to do:
- Set up the bank account that will be used to pay your employees.
- Enter your employees' bank account information – this is where they want to receive their paycheque.
When setting up direct deposit with Payroll by Wave for the first time, you need to enter all this information more than 7 days before your employees need to be paid. Why so early? It can take up to 3 days to verify the bank account you enter, and the transfer of money from your bank account to your employee's bank account takes 4 days.
A lot of Wave customers cut cheques for their first payroll (since you're often on a tight schedule) and use direct deposit moving forward.
Let's get started!
Set up the bank account that will be used to pay your employees
- In the Payroll section of the left-hand navigation menu, choose Direct Deposit. If you've never started the Direct Deposit application before, you'll be taken to an Enable Direct Deposit page. Gather a piece of government issued photo ID and have all of your business owner information available, then click Get Started.
- The Direct Deposit setup process includes 5 steps: Business Information, Owner Information, Identity Verification, Banking Information and Bank Connection.
There are 2 important things to remember when completing this application:
- This is all of the Direct Deposit information related to your Business. We'll ask for your employees' Direct Deposit details later, in the employee profile. For now, do not enter any employee related information.
- The direct deposit connection is not the same bank connection used to import your transactions in Accounting
- After you enter Business Information (1), you'll enter your Owner Information (2). This will need to be someone with ownership stake in the business and signing authority on the business bank account.
A soft credit check is also a part of our application. This will not impact your credit score and is done by Wave after the application is submitted.
- You will complete a quick ID Verification (3). We'll ask you to upload a piece of government issued photo ID. You may see a few ID verification questions here. Simply answer these to the best of your ability, as quickly as you are able. Responses are timed, don't please don't use Google. Some wrong answers are fine.
- Add the Banking Information (4) for the Payroll funding account. This is the bank account money will come out of to pay employees and your CRA remittances. This must be a Canadian bank account.
- You'll then need to create a Bank Connection with our partner VersaPay.
VersaPay is a service Wave uses to ensure your bank transactions and information are secure, and to process the transactions. Learn more about Wave's relationship with VersaPay.
- On the VersaPay page, enter all of your bank information correctly and set up security questions.
Make sure the email address you enter is one you use often. VersaPay will be in touch!
- On the confirmation page, review all of the information very carefully. If any of it is incorrect, click Edit payment details. If it is all correct, click Approve this Debit Agreement.
- After you confirm the agreement, VersaPay will send you an email to validate your account. The email will have the subject line "This debit agreement is awaiting bank account verifications."
- Once you receive the email from VersaPay, within 2-3 days, VersaPay will make a small deposit in your bank account – so be on the lookout! When you see this deposit, you need to log in to VersaPay and enter the amount in order to finish your direct deposit set up. The login link will be in the email they send you to validate your account.
The VersaPay transaction should have the description VersaPay BUS. If you don't see the transaction after a few days, or do not have access to online banking, you can call your bank and ask them for the deposit amount.
While you are waiting for the deposit from VersaPay, you can move on to setting up your employees for direct deposit.
- After your bank account is verified in VersaPay it's a good idea to head back to the Direct Deposit section of your payroll account in Wave to check out the status of your Direct Deposit application.
Once your VersaPay agreement is successful and you have verified your account in VersaPay, you still need to go through a quick review process on Wave's end. After that we'll manually update your account, enabling you to approve payrolls with Direct Deposit. We'll send you an email from Wave when this has happened.
Set up where your employees' want their paycheques deposited
- Click on the Employees section and choose the employee you want to set up by clicking on the employee's name.
- Click Direct Deposit from the left menu.
"Confirm account" is asking you to re-enter the account number.
Ensure that the Branch number, Institution number, and Account number are correct! If you aren't sure about any of the numbers, we recommend getting a void cheque from your employee.
- Click Update to save the information entered.
You can come back and edit this information anytime.
You've done all you can do for now! Once you've validated your account with VersaPay and been reviewed by Wave, you'll be ready to pay your employees with direct deposit.