Direct-deposit return codes and what they mean

The codes you actually see

R01 — Insufficient funds. The receiving bank could not credit because the receiving account did not have enough cleared balance. Rare on an incoming payroll; more common on a micro-deposit verification step. The deposit is reversed; the employee provides a different account.

R02 — Account closed. The account the deposit was sent to is no longer active. Most common when a terminated employee's account is closed after their final paycheck. The employee provides a current account and a re-issue is required.

R03 — No account / unable to locate account. The account number does not match any account at the receiving bank. Usually a typo in the account or routing number. Verify the digits and re-issue.

R04 — Invalid account number structure. The account number itself is not formatted correctly for that bank. Same fix as R03 — verify and re-issue.

R07 — Authorization revoked. The employee told their bank they no longer authorize the deposit. The next paycheck has to go through a different mechanism (paper check or a new account on a new authorization).

R10 — Customer advises originator is not known. The employee told the bank they do not recognize the company sending the credit. Usually a misunderstanding (an employee not expecting a direct deposit); occasionally a sign of a wrong account that belongs to someone else.

R16 — Account frozen. The account is subject to a legal hold (judgment, levy, garnishment). The funds are returned; the employee needs an alternate destination until the hold is lifted.

What happens when a return arrives

Returns arrive at the originating bank one to a few business days after the original deposit, depending on the code. Payrollix receives the return notification, marks the deposit as returned on the payroll record, and surfaces the code on the employee's payment.

For codes that require an employee action (R02, R03, R04, R07, R10, R16), the employee is notified to update their bank info or provide an alternate. For codes that point to a data error (R03, R04), the fix is correcting the account or routing number on the employee record before the next payroll.