ACH Return Code R03 Meaning – Why Payroll or Direct Deposit Was Rejected
ACH return code R03 means no account or unable to locate account. Learn why payroll failed, what causes R03, and how long it takes to get paid.
Taylor Reed
2/13/20262 min read
What Is ACH Return Code R03?
ACH Return Code R03 means “No Account / Unable to Locate Account.”
This code is returned when the receiving bank cannot find an account matching the account number provided in the ACH transaction. Because the account does not exist in the bank’s system, the payroll or direct deposit is rejected and returned.
In simple terms:
👉 The bank looked for the account number and found nothing.
Why Does ACH Return Code R03 Happen?
R03 is almost always caused by incorrect bank account information.
Common reasons include:
Account number entered incorrectly
Missing or extra digits in account number
Wrong account type (checking vs savings)
Typo during payroll setup
Payroll system formatting error
New account number entered incorrectly
R03 is different from R02. With R03, the account never existed, rather than being closed.
What Happens After an ACH R03 Return?
Once R03 is triggered:
Bank rejects the ACH deposit
Funds are returned to the employer
Payroll system marks payment as failed
Correct bank details are required
Payroll must be reprocessed or reissued
No funds ever reach the employee’s bank.
How Long Does It Take to Get Paid After R03?
Typical timelines after correction:
1–2 business days if corrected immediately
3–5 business days if payroll approval is needed
Longer if employer delays resubmission
Payment timing depends entirely on how fast payroll reissues the deposit.
Will Payroll Be Reissued Automatically?
Usually no.
Most payroll systems require:
Manual correction of bank details
Payroll approval or off-cycle payroll
Re-submission of the ACH transaction
Employees often must notify HR or payroll to start the process.
What Should Employees Do If They See ACH R03?
Act quickly:
Confirm the correct account number with your bank
Verify routing and account numbers carefully
Confirm checking vs savings account
Update payroll details
Notify HR or payroll immediately
Ask when payment will be reissued
Most delays happen when payroll is not notified.
Is ACH R03 a Legal Payroll Issue?
Potentially.
Even when the error is due to incorrect bank details:
Employers must still ensure wages are paid
Excessive delays may violate wage laws
Alternate payment methods may be required
Repeated delays can justify formal escalation.
Key Takeaway
ACH Return Code R03 means your paycheck failed because the account number provided does not exist at the bank.
It is:
Common
Easy to fix
Preventable
But payroll will not process until the correct account details are submitted.
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