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A NACHA file is the standardized, fixed-width text file employers and banks use to transmit ACH transactions such as direct deposit payroll. It follows the format set by Nacha, the organization governing the ACH network, and contains batch and entry records the receiving bank processes.
The file has a strict structure of 94-character records: a file header, one or more batch headers, individual entry detail records for each payment, optional addenda records, batch control totals, and a file control record. Payroll direct deposits use the PPD standard entry class code for consumer accounts; vendor payments use CCD or CTX. Each entry carries the receiver's routing and account number, the pair a direct deposit prenote verifies, plus account type, amount, and identifying information, and control records carry hash totals used to detect corruption or tampering.
Most employers never see the file because their payroll provider or bank generates and transmits it. Employers who process in house submit it to their originating depository financial institution by a cutoff time, typically one or two banking days before the effective entry date, since the ACH network settles on a schedule and does not run on weekends or federal banking holidays.
The practical issues are timing and accuracy. A holiday falling near payday shifts the submission deadline earlier, and a missed cutoff means employees are paid late, which raises the wage payment timing questions covered in the DOL wage and hour fact sheets. Because ACH files contain full bank credentials for the entire workforce, they demand encryption in transit and at rest and tightly limited access. Reversals are permitted only in narrow circumstances, such as a duplicate or wrong-amount entry, and within strict deadlines.
A strict sequence of 94-character records: a file header, one or more batch headers, entry detail records for each payment, optional addenda, batch control totals, and a file control record. Control records carry hash totals used to detect corruption or tampering, and each entry holds the receiver's banking details and amount.
By the originating institution's cutoff, typically one or two banking days before the effective entry date. The ACH network settles on a fixed schedule and does not run on weekends or federal banking holidays, so a holiday near payday moves the deadline earlier and a missed cutoff means late paychecks.
Like the sensitive data they are. A payroll file contains full bank credentials for the entire workforce, so it needs encryption in transit and at rest and tightly limited access. Most employers never handle the file directly because their payroll provider or bank generates and transmits it on their behalf.