The new ACH formatting requirements for Company Entry Descriptions took effect on March 20, 2026. Compliance is mandatory.
“PAYROLL” and “PURCHASE” ACH descriptions are effective as of March 20, 2026
As part of the ACH Network’s ongoing efforts to reduce fraud and improve the recovery of funds, two new rules are effective as of March 20, 2026. These amendments introduce standardized Company Entry Descriptions—“PAYROLL” and “PURCHASE”—to bring greater transparency to transactions and strengthen risk mitigation. Here’s what you need to know to stay compliant and protect your business.
| Required Description | Detail |
| PAYROLL | This description must be used for PPD credit entries related to wages, salaries, and similar compensation payments. It allows Receiving Depository Financial Institutions (RDFIs) to monitor payroll activity more effectively, potentially supporting logic for early funds availability and helping reduce payroll fraud risks. |
| PURCHASE | This descriptor applies to WEB debit entries (and certain TEL entries under Standing Authorization) for eCommerce transactions, including recurring purchases first authorized online. Note: Georgia’s Own Credit Union does not originate WEB or TEL entries. While ODFIs are not required to verify the accuracy of the descriptor, its standardized use can enable better identification of e-commerce transactions. |
Examples
| PAYROLL |
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| PURCHASE |
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Key compliance tips
Early adoption of the new ACH descriptions has been permitted; after the effective date, use is required. While Receiving Depository Financial Institutions (RDFIs) are not required to take action based on these descriptors, standardized usage supports fraud monitoring and transaction transparency across the ACH Network.
