Direct Deposit Authorization Form

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A direct deposit authorization form authorizes a third party, usually an employer for payroll, to send money to a bank account. Commonly, an employer requesting authorization will require a voided check to ensure that the account is valid.

After completing, an employer will be able to send payments directly to the employee’s bank account.

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How to Add an Employee to Payroll

An employer will need an individual’s personal and banking information to add them to their payroll service. This will allow the employer to pay the employee while deducting federal, State, and any local taxes directly from their gross pay.

Step 1 – Employer Needs to Have an EIN

This is often referred to as the ‘Social Security Number’ for businesses. Like a social security number, it’s nine (9) numbers although is presented in this format xx-xxxxxxx. This is free to obtain for a business entity that is created in any of the 50 States and territories. The IRS will ask generic questions about the status of the entity and its functions and after 10-15 minutes the EIN number will be provided in a completed Form SS-4 at the end of the session.

If the applicant applies through the mail, it will take approximately 10-15 business days.

Step 2 – Collect Required Government Forms from Employee

The employer will need to collect the necessary government required forms to ensure the individual is allowed to work in the United States. These include:

The aforementioned forms are required for the employer to keep on file.

Step 3 – Give and Collect Employer Forms

The employer should give the following forms to the employee:

The employee will be required to complete and return the Direct Deposit Authorization Form for the employer to add the information to their payroll and begin depositing their pay into their account.

Step 4 – Add to Payroll

When adding an employee to an employer’s payroll schedule, they will be responsible for withholdings and deductions. An employer can choose to deduct these items on their own or elect to pay for a payroll service that does this automatically.

The employer will have two (2) choices.

  1. Do-it-Yourself Payroll – Use a Free Online Calculator while using IRS Publication 15 (scroll to ‘Percentage Method Tables for Income Tax Withholding’ on Page 45).
  2. Payroll Providers – The most popular providers are Gusto, OnPay, Xero, and ADP. These providers allow the process and payment to Federal and State tax authorities to be much easier for the employer. Depending on if the service saves enough time to compensate for the payment, this may be the best solution for a busy entrepreneur that doesn’t have time to process payroll by hand.

The deductions the employer is required to make are as follows:

  • Government Deductions – These include Federal Income Tax (FIT), Social Security and Medicare (also known as FICA), State tax deductions, and any local income taxes.
  • Other Deductions – If the employer has other deductions they must be subtracted as well. These include, but not limited to, Health Insurance, Retirement Plans (401(k)), and any deductions for Charitable Donations.

Step 5 – File Form 941 with the IRS Every Quarter

IRS  Form 941 must be filed with the Internal Revenue Service on a quarterly basis.

The form details the following quarterly information:

  • Total number (#) of employees;
  • Social Security and Medicare withholding amounts;
  • Sick or leave pay;
  • Insurance claims; and
  • Any other required revenue details.

The form should be filed in accordance with the following periods:

  • 1st Quarter – January 1 to March 30 is due May 10;
  • 2nd Quarter – April 1 to June 30 is due August 10;
  • 3rd Quarter – July 1 to September 30 is due November 10; and
  • 4th Quarter – October 1 to December 31 is due February 10.

At this time the accounting of the business is complete with the employee successfully added to their payroll system.

(Video) What is a Direct Deposit Authorization Form?

How to Fill-in a Direct Deposit Form

Step 1 – Complete the Account Holder’s Name and Address.

Step 2 – You will need to report the Name of your Bank on the first line. Then, enter your Account Number on the appropriately labeled blank line. Finally, locate the 9 Digit Routing Number on your personal check and enter it on the blank line labeled “9-Digit Routing #.”


Step 3 – Select the type of Account you would like the deposit to be made to by filling in one of the check boxes. You may choose “Checking” or “Savings.” You will need to attach a voided check for each Account being linked to the Direct Deposit action.

Step 4 – On the blank line preceding the words “Company Name,” report the Name of the Company you are authorizing to make deposits to your account.

Step 5 – Sign your Name after the words “Employee’s Signature,” then provide the Date you signed this on the blank line directly below this.


Step 6 – Submit this form to your Employer’s Payroll or Human Resources Department. Make sure, you are submitting it to the proper office.