Payroll Tax Services
What Is Fedwire Drawdown?
With Fedwire Drawdown, payroll providers are in complete control: you submit payroll files to us and we virtually eliminate the risk of insufficient funds (NSFs) so you can sleep at night.
Say Goodbye to NSFs
The biggest benefit to this service is that it guarantees funds. There is virtually no possibility of NSFs because we won't send out employee funds until we confirm that we've received your client's wired payment. If we don't receive their payment in time, our system automatically suspends their payroll. If we do, their payroll is automatically released.
And everything is seamless: you do not need to manually update anything, send us multiple files nor use a different system – you can have normal ACH payroll processing and Fedwire Drawdowns in the same file.
Fedwire Drawdown is also about one-third of the cost as direct wires. However, it's not for everyone because there is a cost. From our experience, it's ideal for processing payroll for clients that have 25 to 30 or more employees.
Without Fedwire Drawdown, payroll providers just have to hope for no NSFs, and hope is not a strategy. When you collect on Thursday and pay on Friday, you have to hope you don't have NSFs on Monday or Tuesday. You can require your clients to pre-fund their payroll, but they may balk at wiring their payroll funds to you or submitting payroll on Monday for Friday payroll considering the timing and direct wire costs.
Additional Fedwire Drawdown Benefits
- Confirm funds much sooner than standard ACH
- Your clients avoid inconvenience of having to wire funds
- Offer next-day payroll processing without the risk level associated with ACH
- Keep clients on payroll services even if they are a credit risk
- Process high-liability payrolls or payrolls for large clients without taking on the risk of large NSFs
- Process more similarly to the payroll industry giants
Fedwire Drawdown Funding & NSF Policy
- Only payrolls meeting the $100k rule will automatically collect as Drawdown; under 100k will be collected by ACH
- PTM will not submit a redraft if the funds are not available; the client will be required to wire in the funds
- NSF fees for high liabilities are subject to higher NSF fees