Credit limits
Manage payroll risks effectively with credit limits for accelerated ACH processing.
What Are Credit Limits?
Credit limits cap the total amount of accelerated payroll processing (ACH with 2-day or faster settlement) an employer can process in a calendar week. These limits are a standard tool in the payroll and payments industry to manage liquidity risk.
Why Does Check Enforce Credit Limits?
When an employer uses accelerated ACH to fund payrolls, Check sends funds to workers before receiving confirmation of a cleared payment from the employer. This creates a timing gap: the employer’s ACH debit may still be returned by their bank - due to insufficient funds, a closed account, or lack of authorization - after the payroll has already been paid out. If this happens, Check has already advanced the funds and must absorb the shortfall until it can be recovered, which can lead to direct losses and strain on company-held liquidity.
Credit limits reduce this exposure by capping how much accelerated ACH any one company can process in a week, limiting the potential impact of returned ACH funding debits.
One of Check’s core value propositions is absorbing payroll risk on behalf of our partners so they don’t need to build their own liquidity and risk management systems. As our partners scale, large failed fundings could create significant strain on our ability to process accelerated payrolls. Credit limits protect this capability by:
- Limiting exposure to high-value ACH returns
- Preserving cash reserves to ensure valid payrolls are processed without delay
- Sustaining our ability to offer accelerated payroll as a reliable service
This ensures we can continue protecting our partners and paying all workers on time, every time.
How are Credit Limits Enforced?
Checks’ employer-level credit limits cap the total cash requirement of payrolls funded via accelerated ACH processing that a company can process in a given calendar week.
Examples
- If a company has a weekly credit limit of $200,000 and attempts to submit a payroll with a cash requirement of $210,000 via 2-day (accelerated) processing, it will cause an error at payroll preview because because the company’s weekly limit has been exceeded. The company should now follow one of the alternative options - such a funding by wire (outlined below) - to process the payroll.
Reminder: These limits apply only to accelerated processing (two-day or next-day processing periods). All payrolls processed via three-day ACH or funded by wire are not subject to weekly credit limits.
How Default Limits Are Determined
Default credit limits are determined based on partner-level risk assessments. More information on how we classify partner risk can be found here. If companies with upgraded credit limits experience fraud, significant credit losses, or other material risk events, Check may change that account's risk tier at any time at our sole discretion.
How To Know When a Credit Limit Is Reached
During payroll preview, companies will see warnings via the payroll preview API call response, and in the UI (if running via Console) if the current payroll would cause them to exceed their credit limit. The warning includes details about the current exposure amount and the applicable limit. If the limit is exceeded upon approval, an error will prevent the payroll from being processed through accelerated processing.
For more information an examples of these warnings, refer to API Integration Guide below.
How To Handle a Reached Credit Limit
If a company exceeds its credit limit, any payrolls submitted with funding via accelerated ACH processing will fail during preview until the weekly limits reset. To resolve, partners have several options:
1. Use Standard ACH
The simplest fallback is to switch the payroll to standard three-day ACH processing, which does not consume credit capacity. No additional configuration is required - just update the processing speed when submitting the payroll.
2. Fund via Wire
Companies can also switch their payrolls to be funded via wire to bypass the credit limits. For more information about funding via wire, refer to Funding payroll via wire.
3. Use Manual Payments
Employers can also choose to mark items as “manually paid” in the API and use off-platform methods to pay employees (e.g., paper checks, direct wires). This requires the partner to ensure accurate payment and reconciliation outside of Check’s system.
Payee-level Credit Limits
For some Check partners, credit limits are also enforced on a per-payee, per-week basis. These are referred to as “payee-level limits”. Partners who payee-level credit limits are applicable for will be notified in advance of them being enforced.
- Payee-level limits cap the total gross pay for an individual employee (or contractor) paid via direct deposit for payrolls on accelerated processing in a given calendar week.
For partners where both company and payee-limits are enforced, an employers’ payroll will be considered to be exceeding credit limits if either:
- The company’s total accelerated payroll for the week surpasses its weekly limit, or
- Any single payee included in the payroll exceeds their individual payee limit for the week (for partners where this limit is relevant)
Example:
- Employee-level example: If a payee has a weekly limit of $4,000 and is scheduled to receive a $30,000 bonus in a payroll funded by accelerated ACH processing, the company will encounter the limit at payroll preview and should now follow one of the alternative options - such a funding by wire (outlined below) - to process the payroll.
Credit Limits Upgrades
Companies that demonstrate a consistent ability to fund large payrolls and a clear business need for higher limits will automatically receive credit limit increases.
To qualify for an automatic upgrade, a company must meet these criteria:
- Have been live on the Check platform for at least 90 days and successfully processed 10 payrolls. (All 10 must have no associated failed fundings.)
- Have no failed fundings in the past 90 days.
- Have exceeded 80% of their default employee or employer limits in at least 3 of the last 12 weeks.
Note: If a company with an increased limit experiences a failed funding, their limit will automatically revert to the standard level. The company must then re-qualify under the original criteria before being considered for another increase.
For New Employers
(Employers who would like to apply for credit limit increases at the time of onboarding)
In special circumstances, Check may grant credit limit increases to companies during their onboarding process. These approvals are always subject to review and require the employer to provide evidence of a consistent track record of large, successfully funded payrolls with previous payroll providers.
Increases in Company Limits | |
How to Request | Reach out to Check support to submit a request using the “Credit Limit” request category. In your request, please include the following documentation:
◦ 3 months of bank statements demonstrating payroll withdrawals
◦ 3 months of payroll history from previous provider (with matching bank statement withdrawals). |
Criteria
(All must be met) | ◦ Documented history of payrolls that would have approached or exceeded starting weekly Company limits.
◦ Clean funding record with no failed fundings.
All approvals are subject to Check's request for additional documentation and analysis. |
Viewing Credit Limits in Console
Partners can view Credit Limit policies and current usage for specific companies in Console.
To access this information, open the employer of interest in Console and navigate to the "Company Info" page. Scroll to the "Credit Limits" section where you can see details on both the company's current Company and Payee limits, along with their current weekly usage.
Companies Using the Payroll Component
Partners using the Payroll component to allow employers to manage their payrolls will see credit limit validation and notifications directly in the component if a limit is exceeded during preview. No integration action is needed in these cases.
API Integration Guide
POST /approval
Attempting to approve a payroll which has caused either individual payees to have exceeded their credit limit or the company to exceed its credit limit will result in a 400 error with an error type which describes the type of credit limit that was exceeded and a message describing how to resolve the issue. The error type will be one of either:
company_credit_limit_exceeded— This means the company has exceeded its weekly credit limit.
The input_errors field can be used to determine the exact entity that exceeded its credit limit.
Company limit exceeded example
{
"error": {
"type": "company_credit_limit_exceeded",
"message": "The payroll failed credit limit validation. To proceed, please change the payroll's funding_payment_method to 'wire' or update the payroll's processing_period to either 'three_day' or 'four_day' (note: updating the processing_period may also necessitate a change to the payroll's payday in order to provide adequate time for approval)."
"input_errors": [
{
"message": "Company reached $200,000.00 credit limit for calendar week. Exposure would be $210,000.00.",
"field": "company",
"field_path": ["company"]
}
]
}GET /preview
Attempting to preview a payroll which has caused either individual payees to have exceeded their credit limit or the company to exceed its credit limit will result in a successful preview with the warnings array populated. More documentation about payroll warnings can be found here.
Note that though the preview will still succeed, so that you can view tax and deduction amounts, the payroll cannot be approved due to the credit limits. There will be separate warnings for individual limits that have been exceeded, and a limit of 50 credit limit warnings per preview response.
In order to see all warnings for payrolls which have more than 50, the user must resolve some or all of the first 50 warnings, in which case additional warnings will be displayed on the subsequent preview request.
Company limit exceeded example
{
...
"warnings": [
{
"code": "credit_limit_exceeded"
"reason": "company_limit_exceeded"
"reason_description": "Company has exceeded their $200,000.00 credit limit for the week.",
"detail": {
"exposure": "210000.00",
"limit": "200000.00"
}
}
]
...
}
Last updated on August 14, 2025