What's covered in this guide?
What is an NSF return?
An NSF (Non-Sufficient Funds) return occurs when your bank rejects an ACH debit initiated by Workforce Payroll — either for payroll funding or tax impoundment — because the transaction could not be completed.
This means the funds Workforce attempted to collect from your account were not successfully transferred. This is a serious matter and a breach of contract.
Why NSF returns happen
NSF returns don’t always mean you lack funds in your account. Common causes include:
Insufficient funds — Your account balance was too low to cover the debit at the time it was processed
ACH block or filter — Your bank requires pre-authorization of ACH originators. If Workforce’s banking partner is not approved, the transaction is automatically rejected
Manual ACH approval required — Some banks require manual approval for each debit. If not approved in time, the transaction is returned
Account restrictions — Holds, freezes, or other limitations may prevent outgoing debits
Important: If your bank uses ACH blocks or filters, you must add Workforce’s banking partner as an authorized originator. Contact your Workforce representative for details.
What happens when you receive an NSF
When an NSF return is received, you will be contacted by a Workforce representative notifying you of the return. The following applies immediately:
Payroll posting is suspended — You cannot post new pay runs until resolved
Tax filings and payments are paused — Workforce will not file or remit taxes while NSF returns are outstanding
Immediate wire required — Funds must be wired immediately (ACH is not accepted)
You may be moved to a longer processing window — To prevent future NSFs, you may be forced to post on a three- or four-day window moving forward. See the Payment Dates and Deadlines help guide for more information.
NSF fees
Each NSF return incurs a fee of $100 per day, up to a maximum of $300 per occurrence.
Fees begin accruing on the day the NSF return is received and continue daily until funds are wired and confirmed.
Fee Schedule
Day | Fee per NSF |
Day 1 | $100 |
Day 2 | $200 (cumulative) |
Day 3+ | $300 (maximum) |
How to resolve an NSF
Step 1 — Contact your Workforce representative
Obtain wire instructions and confirm the total amount owed.
Step 2 — Wire the funds immediately
Send a wire transfer for the full amount. The wire must be received (not just initiated) as quickly as possible.
Step 3 — Resolve the underlying cause
Before your next payroll:
Add Workforce’s banking partner to your approved ACH list (if required)
Ensure timely manual approvals (if required)
Maintain sufficient account balance
Step 4 — Confirm resolution
Once the wire is received and issues are resolved, Workforce will restore your account and re-enable payroll.
Impact on tax filings
While an NSF is outstanding, Workforce will not file or pay taxes on your behalf, including:
Federal income tax
Social Security and Medicare
FUTA
State and local taxes
Delayed payments may result in penalties and interest, which are the employer’s responsibility.
Impact on employee payments
A payroll NSF means employee pay funds were not successfully collected.
Employees may not receive pay on time or at all until resolved
Employers are still legally required to pay employees
Late payments may result in penalties under labor laws
How to prevent NSF returns
Maintain sufficient funds — Ensure your account is funded ahead of payroll
Authorize ACH debits — Confirm Workforce’s banking partner is approved
Monitor your account — Watch for pending ACH debits after payroll submission
Keep contact info current — Ensure Workforce can reach you quickly
Frequently Asked Questions
Can I resolve an NSF with an ACH transfer instead of a wire?
No. NSF resolutions require a wire transfer. ACH is not accepted due to delays.
Will employees definitely not get paid if there is a payroll NSF?
A return may occur after employees have already been paid, but an NSF may also stop payroll from going out to employees if possible.
What if my bank returned the funds by mistake?
You must still wire the funds immediately and work with your bank to prevent future issues.
Are NSF fees charged per pay run or per debit?
Fees are charged per NSF occurrence. Multiple returned debits are treated separately.