– how do some banks make paychecks available several days before the typical “payday”, while others don’t see them until actual payday?

Question

I get paid semi monthly. Usually I can expect to see my check on the actual payday, with my paystub showing the night before.

I got an email from my bank saying they will start showing deposits three days earlier now.

How does this work if payroll doesn’t pay out until specific days?

In: Other

Answer 1

I was in payroll for almost a decade. Assuming you are asking about direct deposit, when your employer processes their payroll data, they send an ACH (automatic clearing house, I think) file out to all the employee financial institutions that they’ve set up. This is done a day or multiple days in advance of your pay date. This is why it is standard procedure that you get paid for what you worked a week or two ago. So that they can generate this file from older data, not data you created by working yesterday, that may be incorrect and need changing. That file has the deposit breakdown, accounts, amounts, and date of pay release. This data transfer is very rarely ever reversed. The bank sees this file sitting there and, at their preference, will “advance” you that incoming amount.