What's covered in this guide?
What is Kotapay?
Kotapay is a payment processing division of First International Bank & Trust, a federally regulated community bank. They have processed ACH payments for businesses across all 50 states since 1993.
When you process payroll through Workforce, employee payments are sent via the ACH (Automated Clearing House) network.
For most businesses, Workforce handles ACH processing directly
Some businesses must process payments through Kotapay due to state regulations
Why some businesses need Kotapay
Each state has its own money transmitter laws that regulate how funds can be moved electronically.
In certain states:
Payroll payments must be originated through a licensed or exempt financial institution
Third-party processors alone may not be sufficient
Because Kotapay is part of a federally regulated bank, it is exempt from these requirements.
Businesses in affected states can process payroll compliantly by routing payments through Kotapay. During onboarding, Workforce will determine if Kotapay is required and guide you through setup.
Setting up your Kotapay account
If required, a dedicated Kotapay account will be created for you.
You’ll need to provide:
Business legal name and DBA (if applicable)
Employer Identification Number (EIN)
Business address
Authorized signer details (name, title, contact info)
Business bank account details (routing and account number)
Kotapay may request additional documentation depending on your business and state.
How payroll works with Kotapay
The payroll process is mostly the same as standard Workforce payroll, with one key difference: You must download and submit a NACHA file
What is a NACHA file?
A NACHA file is a standardized ACH file containing:
Employee payment details
Payment amounts
Bank account information
Steps to Process Payroll with Kotapay
Finalize timesheets
Approve timesheets and resolve errorsReview and post pay run
Confirm accuracy and click Post Pay RunDownload the NACHA file
Available after posting at the top of the pay run page:
Submit the NACHA file to Kotapay
Upload via Kotapay’s portal or follow their process
Once processed, payments are sent to employees via ACH.
Payment timing and cutoffs
Kotapay — not Workforce — controls timing requirements.
Your Kotapay representative will provide:
Submission deadlines — when the NACHA file must be uploaded
Processing windows — required banking days before payday
Important Notes
Post payroll early enough to meet Kotapay deadlines
Banking days = Monday–Friday (excluding federal holidays)
Allow extra time around holidays
Tax collection
Even with Kotapay, Workforce still handles all tax-related processes
Taxes are collected via Workforce’s standard ACH process
Taxes are not processed through Kotapay
Kotapay only affects how employee net pay is delivered.
See the Tax Filings help guide for more information on tax collection.
Wiring funds with Kotapay
If you miss a NACHA submission deadline:
Contact your Kotapay representative for wire instructions
Workforce’s standard wire process does not apply
Continue to post payroll in Workforce as usual, then follow Kotapay’s instructions.
ACH returns with Kotapay
If a direct deposit fails:
Funds are returned to your Kotapay account
Steps to Resolve
Receive notification from Kotapay
Update employee bank details in Workforce
Repay the employee:
Cash or check, or
Off-cycle payroll in Workforce
Mark as Reimbursement to avoid duplicate taxes
Refer to the Payroll Returns help guide for more detail.
Frequently Asked Questions
How do I know if I need Kotapay?
Workforce determines this during onboarding based on state regulations.
Do I need to submit a NACHA file every payroll?
Yes. Each pay run generates a new NACHA file that must be submitted.
What happens if I forget to submit the NACHA file?
Employees will not be paid until it is submitted and processed.
If missed:
Contact Kotapay immediately
A wire transfer may be required
Do I interact with Kotapay directly?
Yes.
Kotapay: payments, deadlines, uploads, wires, returns
Workforce: taxes, payroll setup, general support with Workforce platform
Is there an extra cost for Kotapay?
No, Workforce covers all Kotapay costs.
Where do I submit the NACHA file?
Through the Kotapay portal. Instructions are provided during setup.