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Run the Payroll Fee Auditor →Blog · Payroll Management · Cannabis
Cannabis Businesses: Setting Up Direct Deposit (2026)
Direct deposit for a cannabis business is set up once per employee with a bank authorization, prenoted, then paid through ACH on the pay schedule the state allows, with 280E tax code payroll deductions and cash payroll documentation settling on the same file. BEG runs cannabis business payroll for $45 per employee per month inside the payroll software you already use, all-inclusive, live in 3 to 5 business days.
Setup for cannabis businesses
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.
An employee who customarily and regularly receives more than $30 a month in tips is a tipped employee under the FLSA. An employer may pay a cash wage of at least $2.13 per hour and take a tip credit of up to $5.12 per hour toward the $7.25 minimum wage, must give the employee notice before taking the credit, and may never keep any portion of employee tips.
Timing and the cannabis business pay cycle
The ACH file goes two banking days before payday for the funds to land on the date, which means hours for budtenders and growers close earlier than the payday itself, and 280E tax code payroll deductions 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.
Any person in a trade or business that receives more than $10,000 in cash in a single transaction or related transactions must file Form 8300 within 15 days after receiving the payment. The IRS accepts cash tax payments from unbanked taxpayers at some Taxpayer Assistance Centers by appointment.
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.
- An employee who customarily and regularly receives more than $30 a month in tips is a tipped employee under the FLSA. An employer may pay a cash wage of at least $2.13 per hour and take a tip credit of up to $5.12 per hour toward the $7.25 minimum wage, must give the employee notice before taking the credit, and may never keep any portion of employee tips. [DOL Fact Sheet #15]
- Any person in a trade or business that receives more than $10,000 in cash in a single transaction or related transactions must file Form 8300 within 15 days after receiving the payment. The IRS accepts cash tax payments from unbanked taxpayers at some Taxpayer Assistance Centers by appointment. [IRS Cannabis industry]
Read the full guide to how to set up direct deposit, and the rest of the cannabis business payroll library.
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Frequently Asked Questions
Can a cannabis business 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 cannabis business 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. An employee who customarily and regularly receives more than $30 a month in tips is a tipped employee under the FLSA.
What does managed payroll cost for a cannabis business?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. 280E tax code payroll deductions, cash payroll documentation and state cannabis board reporting 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 Cannabis Businesses. 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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