Many retirement and Health Savings Account (HSA) plans allow for ACH or direct deposits. With OnPay, individual contributions can be directly deposited into the employee's HSA account and/or retirement account.
What we'll cover
- Questions to ask your plan administrator
- Getting started
- Adding employee deductions
- Deductions for retirement accounts
Questions to ask your plan administrator
Before you begin, you'll need to ask your plan administrator a few questions:
- Does your plan administrator accept ACH deposits directly from a third party payroll provider?
- What are each employee's routing and account numbers to which your HSA or retirement contributions need to be directed?
- Is there any specific information that your plan administrator requires in the memo field?
- If your retirement account is with Fidelity, Vanguard, or Charles Schwab, what are their ACH account numbers?
Why do I need ACH account numbers for Fidelity, Vanguard, or Charles Schwab?
For these three providers, each employee will have an account number that's just for ACH deposits. This number is different from their retirement plan account number. Without the proper account information, we will be unable to deposit funds into an employee’s account.
Deductions are added to employees in their employee profile. You can get to an employee profile in your dashboard by clicking on an employee's picture (or their initials). You can also get there from the Workers menu.
Clicking on the Workers menu takes you to the "Employees" list. You can open an employee profile by clicking on their name.
For each employee profile that you wish to add this deduction, click Job, then Deductions.
Adding employee deductions
Click the (+) to add a deduction. Any deductions already set up for this employee are listed here, so you may need to scroll down.
Choose "401K" from the deductions list, and click Add. You'll now see the deduction has been added to the list.
Click on the disclosure triangle to update the details of this deduction.
Under "ACH Information", choose "Active".
Enter the routing and account numbers provided to you by your plan administrator. The Memo field is automatically populated with the employee's name (as shown below), but you can replace this text if required by your plan administrator.
Note: If your retirement account is with Fidelity, Vanguard, or Charles Schwab, each employee will have an account number that's just for ACH deposits. This number is different from their retirement plan account number. Without the proper account information, we will be unable to deposit funds into an employee’s account.
Include Benefit Amount?
Turning on “Include Benefit Amount” will allow your employer match to be included in the ACH deposit amount. Leave this off if the employer match is to be submitted separately.
As you set up this deduction, your work is automatically saved, so when you're finished, you can close the employee profile and move on to your next task.
Deductions for retirement accounts
If you have one or more employees and your 401(k) provider wants to debit your bank account for the total amount of funds, you'll still set up the 401(k) deduction for the employee, but you will not activate ACH. The 401(k) provider will never be able to debit OnPay directly for any funds.
If you have additional questions about setting up this deduction, talk to your plan administrator before you begin.