When payroll falls on a federal banking holiday like Presidents’ Day, direct deposit payments can get delayed. Doing right by your employees means making sure they get paid on time, but holiday schedules can complicate that.
What you’ll learn
What you’ll learn
What to know about payroll and the Presidents’ Day bank holiday
- In 2027, Presidents’ Day falls on Monday, February 15
- Banks are not open on Presidents’ Day as it’s a federal banking holiday
- The ACH pauses transactions on federal banking holidays, meaning direct deposits won’t go through until the next business day
- To make sure employees get their payments on time, adjust your check dates to the Friday before the holiday
There’s a solution, though: adjusting your payroll schedule. A small adjustment ensures your employees aren’t left waiting for their payments. See why and how you can adjust payroll processing around the Presidents’ Day bank holiday, so employees receive their payments on time (and to keep questions to a minimum).
How federal holidays affect direct deposit timing
When you set up direct deposit electronic payments for employees, that payment passes through a whole system before arriving in your workers’ bank accounts.
The basic process goes like this:
- You create a batch of payment data and send it to your bank for processing.
- Your financial institution receives your payment instructions and sends automatic clearing house (ACH) payment files to an ACH operator, typically the Federal Reserve Banks.
- The ACH operator sends the payment entries to the employees’ banks or other financial institutions.
- The employees’ financial institutions then post the ACH entries to the employees’ accounts.
- The money comes out of your business’s account and gets credited to the employees’ accounts as direct deposits of their earnings from the last pay period.
On federal banking holidays, the Federal Reserve is closed and won’t process ACH entries. That means the process that moves wages from point A to point B is delayed. The Reserve Banks won’t process the transaction until the next day, in this case, the Tuesday after Presidents’ Day.
As a result, your employees end up having to wait at least a day longer to get their payments. Let’s take a look at how you can address this.
Adjusting paydays that fall on the holiday
Here’s the thing: You can avoid payment delays, even when payday falls on a federal banking holiday like Presidents’ Day. The solution is adjusting the check dates and payroll submission to be earlier.
While you are not required to take this early payment approach, it’s a standard small-business practice to maintain employee trust. Even a one-day delay in getting their payments can negatively affect your employees, because the majority of Americans are living paycheck to paycheck. Taking the initiative to send their payments early goes a long way toward keeping your employees happy.
Keep in mind that bank holiday closures don’t just affect processing when payday falls on the holiday. If your payday falls on the Tuesday after the Presidents’ Day bank holiday, for example, you still need to make adjustments to account for the fact that the banks will be closed on Monday for the holiday.
Here’s a quick reference to keep track of everything.
| Scheduled payday | Adjusted check date | 2-day turnaround deadline | 4-day turnaround deadline |
| Monday, Feb. 15 (Presidents’ Day) | Friday, Feb. 12 | Wednesday, Feb. 10 | Monday, Feb. 8 |
| Friday, Feb. 12 | Friday, Feb. 12 (No change) | Wednesday, Feb. 10 | Monday, Feb. 8 |
| Tuesday, Feb. 16 | Tuesday, Feb. 16 (No change) | Thursday, Feb. 11 | Tuesday, Feb. 9 |
In addition the table, we break these down as examples below.
Example 1: Payday on Presidents’ Day, Monday, February 15
- Say your payday falls on Presidents’ Day, which is on Monday, February 15 in 2027.
- In that case, you’ll need to adjust your check dates to Friday, February 12.
- You also need to submit your payroll early, by Wednesday, February 10, assuming a two-day turnaround. If you’re working with a four-day turnaround, submit your payroll by Monday, February 8.
These Presidents’ Day 2027 payroll dates ensure that your employees’ paychecks arrive before payday on February 15. That way, the bank holiday doesn’t cause any inconvenience for your workers.
Example 2: Payday on Friday, February 12
- If your scheduled payday falls on the Friday before the Presidents’ Day bank holiday, you’re in luck. Because the entire payroll processing window happens before the Federal Reserve closes on Monday, your schedule is unaffected.
- You won’t need to make any special holiday adjustments and can run payroll exactly as you normally would. For a Friday, February 12 payday, you simply submit your payroll by Wednesday, February 10 (for a two-day turnaround) or Monday, February 8 (for a four-day turnaround). No extra action is required.
- With a four-day turnaround, leave the check date February 12, but submit payroll by Monday, February 8, for payday on Friday.
Example 3: Payday on Tuesday, February 16
- Finally, if payday falls on the Tuesday after Presidents’ Day, you don’t have to change your check date.
- Just submit your payroll by the previous Thursday to account for the processing delay on Monday.
- If you’re working with a four-day turnaround, submit your payroll by the previous Tuesday instead.
In 2027, the submission deadline would be February 11 for a two-day turnaround or February 9 for a four-day turnaround.
Planning your payroll run to avoid processing delays
The key to making sure you don’t pay employees late is a smooth payroll system. You also need to stay on top of federal banking holidays and other external factors that could affect payroll processing.
Follow these steps:
- Establish your pay frequency (e.g., weekly, biweekly) and stick to it.
- Check whether any paydays fall on federal banking holidays like Presidents’ Day.
- If so, tell employees you will adjust accordingly to get them their money on time (or earlier).
- Figure out your deadlines for submitting your payroll so there’s enough time for ACH file processing before the holiday.
- Double-check all your payroll data and meet these deadlines.
Instead of trying to remember all the bank holidays, when they fall, and when your adjusted payroll deadlines should be, consider using an automated payroll system. These systems can manage these dates for you and make the whole payroll process less stressful and time-consuming.
Helpful and responsive
“OnPay has excellent customer service, running payroll takes no time at all, and I always get a quick response whenever I need to reach out to them.”
— Tommy Huhn, National Applicant Screening
Who is affected by the Presidents’ Day bank closure?
Because Presidents’ Day is a federal holiday, many places, including banks, are closed. The US post office and government offices will also be closed. Some private businesses choose to close on these holidays, but others stay open. Check with any service providers or other businesses you may need to see if they’ll be operating during the Presidents’ Day bank closure.
Proactive payroll around the Presidents’ Day holiday builds trust
Running payroll around a federal holiday doesn’t have to be a scramble. Navigating the Presidents’ Day bank closure isn’t just about memorizing turnaround deadlines — it’s about maintaining trust with your team. When you proactively adjust your schedule to ensure your employees are paid on time (or even a day early), you send the message that you value them and respect their financial needs. While bank holidays will always cause a temporary pause, your business doesn’t have to miss a beat. By planning ahead and leaning on automated payroll systems like OnPay to track these shifting dates for you, you can focus on running your business and supporting your people.
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.