1. Implementing Payroll for Canada
  2. Direct Deposit Configuration

Direct Deposit Configuration

Direct deposit refers to the electronic transfer of an employee's net pay directly into the accounts designated by the employee. For employees who have requested direct deposit payments, the application generates a direct deposit file for Canada.

The direct deposit file contains the details of the net pay distribution for each employee deposit. Financial institutions use the details in the file for processing and distributing the payments.

The CPA Standard 005 electronic file format is the format that's used for direct deposit transactions.

Before you generate the direct deposit file, complete these tasks:

  • Set up the financial institutions

  • Set up employer account information and organization payment methods

  • Set up employee account information

Setting Up Financial Institutions

Use the Manage Banks task in FSM to set up the financial institutions, branches, and account information for the organization. Before you enter the employees direct deposit account information, you must set up the financial institutions and branches that your employees use.

When defining the bank account information, Oracle recommends that you enter the transit number in the Account Name field. The transit number is required for recalls and it appears on the Core Payment Register Report.

Set Up Employer Account Information and Organization Payment Method

Use the Organization Payment Methods task to set up employer account information and organization payment methods. On the Create Organization Payment Method page, enter this information pertaining to your financial institution.

Field

Description

Payment Type

Select Direct Deposit, the name for electronic transfer of funds directly into employee designated accounts.

Financial Institution

Name of financial institution sending or receiving the direct deposit orders.

Destination Data Centre Code

A unique six-digit code issued by the financial institution for identifying the destination data institution to which the file is delivered.

Originator ID

Ten-digit code issued by the financial institution. It identifies the originator of the transaction.

Originator Long Name

The long name of the originator of the transaction. It is a name agreed upon with your financial institution.

Originator Sundry Information

Used by the originator to further identify the transaction to the payee or payer.

Originator Short Name

Short name of the originator of the transaction. It is a name agreed upon with your financial institution.

Balancing entries

If you select Yes, the balance debits offset the credits in the direct deposit.

Transaction Limit

Maximum amount of money allowed on a single direct deposit transaction.

Payment Limit

Maximum amount of money allowed on a single direct deposit file.

Transaction Type

Used by the originator to identify the type of payment, and it enables the processing Direct Clearer to further identify the payment to the customer.

The CPA value defaults to '200', which identifies the transaction as a payroll deposit as outlined in the CPA Standard 005 direct deposit specifications. However, you can override this value at runtime by entering a different value in the Override Transaction Type parameter of the Generate Direct Deposit flow.

Return Institution ID

Routing information of the institution branch or office to which items are returned. It is a nine-digit number agreed upon with your financial institution. The format is N NNN NNNNN (without spaces): first position is constant 0, second position is return institution number and the third position is return branch routing number.

Return Account Number

Account number for returns.

Set Up Employee Account Information

You must create a payroll definition that uses the Direct Deposit payment method and assign all employees to this payroll. Set up the direct deposit account information for each participating employee:

  • If you haven't enabled employee self-service, use the Personal Payment Methods task in Person Management area to enter employee's direct deposit information.

  • If you have enabled employee self-service, individual employees can provide their direct deposit account information using the Personal Payment Methods task.

The first account you enter should be the default account. If you define a second personal payment method account, you can specify the deposit amount as percent of the total amount or a flat amount.

After you have set up the employer's account information and the employee's personal payment methods, the processing of direct deposits can occur. Prior to running the direct deposit process, you must complete the following three tasks:

  • Calculate Payroll

  • Calculate Prepayments

  • Archive Periodic Payroll Results

International Payments

When you run the Generate Direct Deposit Payment process for an international payment transfer, an XML file is automatically generated that contains the account and payment details of the international transfer. Customers can access the XML file on the BI server and use the XML to create an user-defined interface to pay Canadian employees to a bank outside of Canada. The employees are paid in a currency other than Canadian Dollars. The Generate Direct Deposit Payment process doesn't create any other output for this type of payment method.

The International Transfer payment type enables you to create an organization payment method for an international transfer and configure personal payment methods for bank accounts outside of Canada.

The following contain international transfer payment details:

  • Payment archive

  • Statement of Earnings (SOE)

  • Prepayments

  • Payslip

  • Payment Register