Solved: ACH Compliance with payroll

CLC1

I tried to get an answer through support via email but they keep giving me an answer to a question I did not ask.

I got this notification from my bank and all I want to know is will my Square payroll be rejected because it is not in compliance because it uses the text 'PAYR' instead of 'PAYROLL'? And can Square simply change with word?

Rule change: Starting March 20, 2026, ACH payroll transactions must include ‘PAYROLL’ in the Company Entry Description field.
Why: NACHA (the organization that governs the ACH network) is strengthening their rules to reduce payroll fraud and misdirected payments.

TheRealChipA

Hey there @CLC1. This new regulation has nothing to do with the business ACH transactions that deduct money from our payroll funding accounts. This regulation is all about what shows up in our EMPLOYEE'S bank statements for their direct deposits. I just asked one of my employees to screen shot their latest direct deposit as it shows in their bank statement. It say "Deposit from Square Inc Payroll." It looks like that satisfies this strange new "nothing burger" rule that our federal government loves.

Chip A.
Square Expert & Innovator and member of the Square Champions group. (But NOT a Square employee, just a seller like you)

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TheRealChipA

Hey there @CLC1. This new regulation has nothing to do with the business ACH transactions that deduct money from our payroll funding accounts. This regulation is all about what shows up in our EMPLOYEE'S bank statements for their direct deposits. I just asked one of my employees to screen shot their latest direct deposit as it shows in their bank statement. It say "Deposit from Square Inc Payroll." It looks like that satisfies this strange new "nothing burger" rule that our federal government loves.

Chip A.
Square Expert & Innovator and member of the Square Champions group. (But NOT a Square employee, just a seller like you)

Was my post helpful? Take a moment to mark it as a solution. Marked solutions help other sellers find possible resolutions to similar problems. Also, if you find your solution elsewhere (say, through Support), it is helpful to come back to your post and tell us about it, then mark that as a Solution. Solutions are what this Community is all about!

CLC1

Thank you so much!