What is the purpose of the ACH file in payroll processing?

The purpose of the ACH (Automated Clearing House) file in payroll processing is primarily to transmit payments to employees' banks. When an employer processes payroll, the ACH file contains the necessary information to facilitate electronic fund transfers, ensuring that employees receive their wages directly deposited into their bank accounts. This method is efficient and secure, streamlining the payroll process by eliminating the need for paper checks and manual deposits.

The other options do not accurately represent the primary function of an ACH file. Transmitting employee personal information or authorizing new hires involves different processes and systems that are not specifically catered to by ACH protocols. Similarly, while the collection of employee taxes is an important aspect of payroll, it is generally managed through other systems and filings rather than through the ACH file, which is focused on payment transactions. Thus, the correct answer underscores the ACH file’s role as a key tool in executing payroll transactions efficiently and effectively.