Making payments via Direct Debit provides a fast and convenient way to pay your staff. With Direct Debits active, payments can be made directly to your employees, IRD and any other payees via an automated direct debit process, so you don't have any extra steps to worry about on payday.
Activating Payments via Direct Debit
To start making payments with Direct Debit, you'll first need to provide authorisation for us to debit your account. You can do so from within PayHero, by clicking Requires Authorisation in Manage > Settings > Payroll Settings. You'll also need to ensure you've selected Direct Debit as your preferred payment method.
Clicking Requires Authorisation will prompt you to confirm the details of the bank account to be debited, the contact phone number that we’ll call to verify your account, the contact email address for Direct Debit notifications, and to authorise Flexitime Limited to debit the account.
Once authorisation has been provided, you'll see confirmation of the authorisation date on the Direct Debit line.
To ensure the security of our customers' bank accounts, employee payments will initially have a processing period of two business days. This applies to the first four regular pay cycles processed via direct debit. Once regular processing is established, payments will be made to your employees the same day (subject to standard bank processing timeframes).
Paying Wages
After Processing a Pay Run, you'll see slightly different options depending on whether or not we’ve contacted you to authorise your bank account, and if regular processing has been established.
Contact Required
The first time you process a pay after enabling Direct Debit payments, the confirmation window will show as follows.
To ensure the security of your account we’ll contact you via email and/or phone to confirm some details. Contact will be made to the email address/phone number provided during the authorisation process.
Payments to your employees, IRD, and any other third parties will only be released once verification has been completed, so please ensure you respond promptly.
Temporary processing period
When you first start making payments via direct debit after your bank account has been verified, you'll see a 2-day processing period applies.
This means there will be a 2-day period between the payment leaving your bank account and the payments being issued to your employees. This 2-day delay applies until four regular pays have been successfully sent via direct debit.
During this time, we recommend processing your pays at least 2 days in advance of your usual pay date, so that PayHero can schedule the payments to your employees to fall on the normal pay date.
This processing timeframe is only temporary and helps to ensure the security of your account, providing assurance that the bank details provided were correct, the transactions have cleared, and the account authorisation is valid.
Once regular processing is established, payments will be made to your employees the same day (subject to standard bank processing timeframes). See Standard Processing for below more information.
Standard processing
Once your account has been verified and regular processing has been established, the confirmation window will show as follows.
Payments will usually be made to employees on the same day (subject to standard bank processing times). Some delays are possible for transactions processed late at night, on weekends or on public holidays.
Frequently Asked Questions
Yes and no - there is a transaction limit for same-day clearance of direct debit payments. The default limit is $30,000 per pay run. This includes all transactions to your employees, IRD, and any other third-party recipients.
Pays exceeding this value can still be paid by direct debit, but will be subject to a 2-day clearance period.
Please reach out to finance@payhero.co.nz if you wish to apply for a higher same-day clearance limit.
PayHero makes payments to payroll recipients twice a day, in the early afternoon and late evening. When your employees will be paid depends on the pay date, the time of day your pay was sent, and whether your account is on same-day processing.
- Same-day processing (evening) - Pays sent between 10am in the morning and 7pm in the evening will be processed that night. Processing begins at 9pm.
- Same-day processing (afternoon) - Pays sent before 10am in the morning (or after 7pm the prior day) will be paid to employees in the afternoon. Processing begins at 12pm.
- 2-day processing period - If your company is on 2-day processing, payments to your employees will be made in the afternoon batch 2 days after you sent your pay (or on the pay date, if later).
After processing begins the time employees receive the payment will depend on inter-bank clearance periods.
Yes, each time a pay run is processed using Direct Debit, a notification will be sent to the email address you supplied when you originally authorised direct debit payments. A further notification will be sent once the payments are on their way to your employees. If you need to change this email address, please contact support@payhero.co.nz.
Once your account is authorised to make payments via direct debit, anyone who can send pays (Admins and Pay Cycle Admins) will be able to send the pay and therefore trigger the direct debit payments.
When you make payments using Direct Debits, your IRD payments will be included automatically. These are held in our account and will be forwarded to IRD on your behalf by the due date (usually the 20th of the following month).
See section 3 of our Subscription Agreement for more information.
Yes, you can send a pay before the pay date. The direct debit from your account will be processed right away, and payments to your employees will be made on the specified pay date.
If you discover a mistake in a pay after it's already been sent there are a few different ways you can handle it, depending on the nature of the error. You can learn more here: Fixing a Mistake in a Sent Pay
Direct debit amounts can't be changed, so if you edit the existing pay and the amount to pay changes, you'll need to identify and pay/recoup any differences manually. It's a good idea to download the Employee Pay Details Report before making any changes, so you can refer back to the original details as needed.
You'll also need to pay the difference in the amount of tax to pay directly to IRD - PayHero will display this amount as a warning in the Unpaid Tax tab.
If one of your direct debit payments to PayHero is dishonoured, all future direct debit payments for your account will be subject to 3-day processing to ensure funds have time to clear before we pay your employees.
How the payments to your employees will be handled for the dishonoured pay depends on whether your employees have already been paid by the time we're notified of the dishonour:
If payments to your employees have already been processed - you'll need to make a manual transfer to us for the outstanding amount. You'll be notified of this via email. If payment is not made immediately additional charges may apply.
If payments to your employees have not yet been processed - the payments will be cancelled and you'll need to pay your employees another way. You'll be notified of this via email.
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