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Run the Payroll Fee Auditor →Blog · Payroll Management · Auto Dealership
Auto Dealerships: Setting Up Direct Deposit (2026)
Direct deposit for an auto dealership is set up once per employee with a bank authorization, prenoted, then paid through ACH on the pay schedule the state allows, with front-end and back-end commission structures and flat-rate tech pay settling on the same file. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
Setup for auto dealerships
Each employee signs a direct deposit authorization with routing and account numbers, the account is prenoted with a zero-dollar test before the first live deposit, and split deposits are recorded per employee. Federal law does not let an employer make direct deposit mandatory to a bank of the employer's choosing, and most states require a paper or pay card alternative for employees who do not opt in.
The FLSA does not require weekly pay, but the dealer must set a regular pay period, and a commission settlement period is presumed to be that pay period. Draws against commission paid within the pay or settlement period may be less than the minimum wage, and the employer may credit those draws against its minimum wage obligation when settling the amount due at the end of the period.
Timing and the auto dealership pay cycle
The ACH file goes two banking days before payday for the funds to land on the date, which means hours for salespeople and finance managers close earlier than the payday itself, and front-end and back-end commission structures for the period is settled on that file or on a documented later settlement date. Off-cycle runs, final checks and corrections use same-day ACH where the bank supports it.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- The FLSA does not require weekly pay, but the dealer must set a regular pay period, and a commission settlement period is presumed to be that pay period. Draws against commission paid within the pay or settlement period may be less than the minimum wage, and the employer may credit those draws against its minimum wage obligation when settling the amount due at the end of the period. [DOL Fact Sheet #11]
Read the full guide to how to set up direct deposit, and the rest of the auto dealership payroll library.
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Frequently Asked Questions
Can an auto dealership require direct deposit?
Federal Regulation E bars an employer from requiring deposit to a particular bank; the employee chooses the account. Many states add that a no-fee alternative must be offered, so a written opt-in with an alternative is the safe policy.
When does the auto dealership pay file have to be released?
Two banking days before payday for standard ACH. Same-day ACH is available for off-cycle runs and corrections at a higher per-item cost. The FLSA does not require weekly pay, but the dealer must set a regular pay period, and a commission settlement period is presumed to be that pay period.
What does managed payroll cost for an auto dealership?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Front-end and back-end commission structures, flat-rate tech pay and F&I chargebacks are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Auto Dealerships. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: IRS: Understanding Employment Taxes
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