How to Set Up Direct Deposit for Your Startup Employees

Setting up direct deposit is one of the first payroll tasks every founder faces after hiring their first employee. It sounds straightforward, but the process requires collecting accurate banking information from each team member — and that's where many small businesses hit an unexpected wall.

Between chasing down paperwork, verifying account numbers, and navigating payroll software, what should take an afternoon can easily stretch into weeks.

This guide walks you through everything you need to know to get direct deposit running smoothly from day one.

Why Direct deposit Matters for Startups

For early-stage companies, speed and efficiency are everything. Paying employees on time, every time, is one of the most important trust signals you can send as a founder. Late or failed payroll — even once — can damage morale in ways that are hard to recover from.

Direct deposit eliminates the logistical headaches of paper checks: no printing, no signing, no mailing, no waiting. Money lands in your employee's account on payday, automatically. For remote teams spread across multiple states or time zones, it's not just convenient — it's essential.

Beyond convenience, direct deposit also reduces the risk of check fraud, lost payments, and administrative errors. Most modern payroll platforms are built around it as the default.

What You Actually Need From Employees

Most payroll providers require one of two things: a completed direct deposit authorization form, or a voided check.

The voided check is the more universally accepted option because it contains all the banking details a payroll system needs — routing number, account number, and bank name — in a verified, standardized format.

The challenge in 2026? A growing number of employees — especially younger workers — bank exclusively through digital-first institutions like Chime, Revolut, or Cash App. Many have never owned a physical checkbook in their lives. Asking them to provide a voided check can create unnecessary friction during onboarding.

The Modern Solution: Digital Voided Checks

Instead of delaying onboarding while employees figure out how to obtain a voided check from their bank, founders can point their team to tools that solve this instantly. Services like VoidFast allow anyone to generate a professional voided check in seconds — no checkbook, no bank visit, no waiting. The resulting PDF includes all the routing and account information that payroll systems accept, and it can be delivered directly to the employee's inbox.

This removes one of the most common bottlenecks in the new hire onboarding process, particularly for startups operating with distributed or fully remote teams. Instead of a back-and-forth that drags on for days, employees can complete this step in under a minute.

Choosing the Right Payroll Provider

Before you can set up direct deposit, you need a payroll platform. The most popular options for startups in 2026 include:

Gusto — Best for early-stage startups that want an all-in-one HR and payroll solution. Simple interface, strong compliance tools, and reasonable pricing for small teams.

Rippling — Ideal for fast-growing companies that need payroll integrated with IT, benefits, and HR in a single system. Scales well as headcount increases.

ADP Run — A reliable enterprise-grade option for founders who anticipate rapid scaling or have more complex payroll needs from the start.

Deel — The go-to platform for startups with international contractors or employees across multiple countries.

Most of these platforms have direct deposit built in as the default payment method and will guide you through the collection process step by step.

Step-by-Step: Setting Up Direct Deposit

Once you have a payroll provider in place, the setup process typically follows these steps:

1. Add your employees to the payroll system — Enter their name, role, start date, and tax information (W-4 for US employees).

2. Collect banking information — Request a voided check or completed direct deposit authorization form from each employee. Tools like VoidFast make this step instant for employees without a physical checkbook.

3. Enter routing and account numbers — Input the banking details into your payroll platform. Double-check every digit — a single error can cause a failed deposit.

4. Run a test deposit — Many payroll providers allow you to send a small test amount (often $0.01) before the first real payroll run. This confirms the account details are correct.

5. Set your payroll schedule — Decide on weekly, biweekly, or monthly pay cycles and configure your cutoff dates accordingly.

6. Process your first payroll — Once everything is verified, run your first cycle and confirm that deposits land on time.

Common Mistakes to Avoid

Skipping the test deposit. It takes two minutes and can save you from a failed payroll that affects your entire team.

Collecting banking info over email. Routing and account numbers are sensitive data. Use your payroll platform's secure employee portal instead.

Waiting until the last minute. ACH transfers typically take one to two business days to process. Submit payroll well before the intended payday.

Not updating banking info when employees switch accounts. Build a process for employees to update their direct deposit details whenever their banking situation changes.

Bottom Line

Payroll setup doesn't have to slow down your hiring or complicate your onboarding. With the right tools and a clear process in place, you can get direct deposit running for new employees on their very first day. The key is removing friction at every step — starting with how you collect banking information. In 2026, there's no reason that process should take more than a few minutes.