Upcoming Warnings for Potential for Late Tax Payments for All Manual 4-Day Payrolls

Normally payrolls on a four-day processing period must be approved by 8pm ET four business days prior to payday. However, we make an exception for payrolls that contain only payroll items with a manual payment method. For example, if an employer forgets to run payroll, they can set the payment method for each item on the payroll to manual, approve it all the way up to and including on payday, and then pay employees with cash or paper checks.

While useful to employers, it’s important to note that in these situations Check cannot guarantee that all tax payments will be made on time if the payroll is funded via ACH. We must wait three business days after payday before making any tax payments triggered by these payrolls, regardless of when the tax payments are due, to ensure we are not taking on ACH credit risk. To avoid late tax payments, we recommend that employers on four-day processing periods minimize the use of all-manual payrolls, and when they are necessary fund them via wire.

In the coming weeks we will be adding a `warnings` attribute to the Payroll object, which will be populated on four-day all-manual payrolls where there is a possibility of late tax payments. By watching this field you can determine when this case has occurred, and surface guidance to Employers on your platform accordingly.