Direct deposit is the standard way Canadians receive their pay, government benefits, and tax refunds. Instead of picking up a physical cheque, funds are transferred electronically into your bank account — usually arriving by 9:00 a.m. on your pay date.
This article explains what direct deposit is, what information your employer or the CRA needs to set it up, and how to get it working with the major Canadian banks and government programs.
How Direct Deposit Works in Canada
Direct deposit runs through Canada’s Automated Clearing Settlement System (ACSS), the national payments infrastructure operated by Payments Canada and used by all Schedule I and II banks plus credit unions.
The process is straightforward:
- You provide your banking details to your employer, the CRA, or another payer (see below for exactly what’s needed)
- The payer submits a payment file to their bank, usually 1–2 business days before the pay date
- The ACSS routes the transaction to your bank
- Your bank credits your account — typically by 9:00 a.m. on the scheduled date
The ACSS does not support real-time transfers (that’s Interac e-Transfer for person-to-person). Payroll via direct deposit is a pre-authorized credit — the payer is pushing funds to you, not pulling from you.
What Banking Information You Need to Provide
Three pieces of information identify your bank account to a payer:
| Field | What It Is | Where to Find It |
|---|---|---|
| Institution number | 3-digit code identifying your bank | On a void cheque; in online banking |
| Transit (branch) number | 5-digit code identifying your branch | On a void cheque; in online banking |
| Account number | 7–12 digits identifying your specific account | On a void cheque; in online banking |
Example (TD Bank): Institution number is 004. Your branch transit might be 00152. Your account number might be 1234567.
The easiest way: provide a void cheque
A void cheque is a personal cheque with “VOID” written across it. It contains your institution number, transit number, and account number printed at the bottom in MICR (magnetic ink character recognition) format. Most employers and government agencies will accept a void cheque as direct deposit authorization.
If you don’t have cheques
Almost all Canadian banks let you generate a direct deposit information PDF or void cheque image through online banking or their mobile app:
- RBC: My Accounts → Account Details → Pre-Authorized Debit form
- TD: Accounts → Account Details → Direct Deposit Info
- BMO: Accounts → Account Details → Direct Deposit form
- Scotiabank: Accounts → Direct Deposit
- CIBC: Accounts → Account Details → Direct Deposit
- Tangerine / Simplii / EQ Bank: Account Details page in the app
Setting Up Direct Deposit for Payroll
To set up payroll direct deposit:
- Ask your employer’s HR or payroll department for a direct deposit enrolment form
- Fill in your institution number, transit number, and account number — or attach a void cheque
- Submit the form (paper or digital, depending on your employer)
- Allow 1–2 pay cycles for the change to take effect — many employers keep issuing cheques until the direct deposit is confirmed
Some employers use online portals (ADP, Ceridian Dayforce, Workday) where you can enter your banking information yourself without going through HR.
Setting Up CRA Direct Deposit
The Canada Revenue Agency uses one set of banking information for all payments it sends you:
- Tax refunds
- GST/HST credit
- Canada Child Benefit (CCB)
- Canada Pension Plan (CPP) and Old Age Security (OAS) — these are set up separately through Service Canada
- Canada Carbon Rebate
- Other CRA benefits
How to set up CRA direct deposit:
Option 1 — CRA My Account (fastest):
- Log in to CRA My Account
- Go to “Profile” → “Direct Deposit”
- Enter your banking information
Option 2 — Through your bank’s online banking: Most major Canadian banks have a direct integration with CRA. Look for “CRA Direct Deposit” in your bank’s app or online banking — you can set it up in minutes without logging into My Account.
Option 3 — When filing your taxes: Complete the direct deposit section on your T1 return. This updates CRA’s records for the tax year you are filing.
Option 4 — By phone: Call CRA at 1-800-959-8281 (individuals) and provide your banking information to an agent.
CPP and OAS — separate setup required
CPP and OAS payments are administered by Service Canada, not CRA. To set up or change direct deposit for CPP or OAS, use My Service Canada Account or call 1-800-277-9914.
Direct Deposit for Provincial Benefits
Provincial governments also pay benefits by direct deposit: Ontario’s ODSP and OW, BC’s Income Assistance, Alberta’s AISH, and provincial child benefit top-ups. Each province has its own enrollment process, typically through the provincial social services portal or by submitting a direct deposit form to the applicable ministry.
Can You Set Up Direct Deposit Without a Cheque?
Yes. Most employers and government agencies will accept a direct deposit authorization form with your banking numbers typed in (no void cheque required). Your bank’s app or online banking portal can provide a PDF direct deposit form that includes your banking information pre-printed — this is the easiest substitute for a void cheque if you bank with a no-cheque online bank like EQ Bank or Tangerine.
Common Direct Deposit Questions
Can direct deposit go to a savings account? Yes. You can direct deposit to any chequing or savings account — just provide the account number for the savings account instead of your chequing account.
What if I switch banks? Update your banking information with each payer (employer, CRA, etc.) separately. Allow 1–2 pay cycles before the old account is closed to ensure no deposits are missed. CRA can take up to 5 business days to update direct deposit information.
What if a deposit is sent to a closed account? The deposit will be returned to the payer, who must then reissue the payment. This process typically takes 5–10 business days. Update your banking information before closing an account.
Is direct deposit mandatory? In most provinces, employers cannot legally require employees to receive pay by direct deposit — they must offer an alternative (usually cheque). However, direct deposit is strongly encouraged and the overwhelming majority of Canadians use it.