Each and every business owner knows how important it is to pay their staff on time. Direct deposit in QuickBooks Online is a popular choice for employers seeking a simple and practical method of paying their staff. Within the QuickBooks family, QuickBooks is one of the most sought-after software products. Because of all the advantages this program offers, such as:

Convenient access at all times and from any location.
Obtainable from any device, including Android and iOS tablets and smartphones.
Far more stringent data security.
Software updates automatically, saves the time of user of updating it manually to the newest version.

One more excellent advantage is that QuickBooks serves as the initial host for the majority of new features introduced by Intuit. The same holds true for a function known as direct deposit. The direct deposit feature in QuickBooks Payroll enables customers to deposit employee salaries and other benefits straight into their accounts. As of right now, QuickBooks Beta offers this functionality. This post will define setting up Payroll direct deposit in QuickBooks.

In this article:

About Direct Deposit in QuickBooks Online

An electronic method of sending money across accounts whether the savings or checking accounts is called direct deposit in QuickBooks Online. You don’t have to be there in person to transfer money from your account to their accounts using QuickBooks Payroll. The money is put into the employee’s account by the employer via QuickBooks, and depending on the platform utilized, it usually happens the next day or in two working days. QuickBooks offers a simple and handy digital fund transfer feature that is advantageous to both companies and employees. QuickBooks also offers free direct deposit.

How to Set up Payroll Direct Deposit in QuickBooks Online

Payroll direct deposit can be set up in QuickBooks Online with ease. You can check a test transaction and enroll each employee in direct deposit after the first setup.

Setting up of Direct Deposit

First you have to select the settings icon, so that you can easily access payroll settings.
Select the Bank Accounts.
Fill in the blanks for your bank account, principal officer, and business.
Hit the Save button in order to save the changes.

An email confirming your request to confirm your details will be sent to you. Another email verifying your pre-authorized debits will be sent to you after the information has been validated.

Verifying of Direct Deposit Test Transaction

After the initial setup, it is required to confirm the direct deposit test transactions. Within two to three business days, two test debits totaling less than $1.00 (CAD) each are sent to your account.

In order to confirm these figures:

To access the Payroll settings, select the Settings ➫️ icon.
Choose Verify your account after selecting the edit button next to Bank accounts. 24 to 48 hours after the bank account details are input, this option becomes available.
Put the two test transaction amounts (less than $1.00) in the appropriate boxes. Enter just the cents-a dollar symbol is not needed. (47 for $0.47, for instance)
Click Verify.

You can now set up employees following a successful verification.

After adding details about the direct deposit to your payroll settings, if after three business days you still don’t notice these transactions; try following steps to re-trigger the test transaction:

To access the Payroll settings, select the Settings icon.
After selecting Verify test transaction, click the edit icon next to Bank accounts.
Fill in the boxes below with $0.01 to reset the test transaction, now you have to choose Verify three times. By doing this, you will cause the test transaction to fail and be able to add the banking details once more.
Return to Payroll Settings and choose the Edit option by hovering over the Bank Account entry.
Enter the right bank account details again.
To save changes, select Continue.

The test transaction should be sent to your bank via QuickBooks Online as a result. The transaction will display in your bank account after an additional three business days.

Setting up of Each Employee on Direct Deposit

You can now set up each employee once your test direct deposit transaction has been confirmed:

Verify that the worker has signed the Direct Deposit Authorization Form.
Navigate and select Employees under Payroll.
Decide which employee to add to your direct deposit list.
In the Edit Payment method screen, choose Direct Deposit using the drop-down box.
Use the data from the employee’s authorization form to fill in the fields.
Choose Save.

The setup procedure is now complete. At this point, you can start paying your staff via direct deposit.

Check Direct Deposit Limits and Processing Times

See Get help if you’re above a direct deposit limit for additional details on how to verify your limitations and processing timeframes.

What happens if I still can’t make direct deposits into my account?

Any of the following circumstances could be the cause of this:

The bank account you supplied is invalid.
Your bank account had no balance, thus we were unable to start the test transaction.
You typed the test transaction amount incorrectly.

We’ll send you an email with information on how to handle one of these scenarios if it happens. Notify@quickbase.com will appear as the sender. If not, get help by contacting Payroll Support.

Key Points to Keep in Mind while Direct Deposit

Regarding direct deposit, keep the following in mind:

Direct deposit pay checks must be approved by you no later than two banking days prior to the pay date, at 5:00 PM PT (8:00 PM ET).
The risk analysis may take up to three days to finish after the initial setup.
Verify the accuracy of all account numbers and information at all times. An employee may not get funds or there may be a delay as a result of inaccurate information.
When it comes time to run your next paycheck, it is preferable to start setting up direct deposit the day following processing paper checks to make sure you are not in a Pending condition.
It can occasionally take up to a week to set up and verify a direct deposit.
The bank account being set up for direct deposit is owned by the Principal Officer.
The Principal Officer (bank owner) and the Primary admin will receive emails verifying bank accounts and about AML/OFAC, but the Primary admin will receive emails about direct deposit.
Most businesses will get an email from notify@Quickbase.com asking for additional information and identification verification in an AML/OFAC email. Before using direct deposit, the Principal Officer must reply to this email with the necessary paperwork; once the ID is submitted, approval may take up to two business days.

Processing Timeline for direct Deposit for QuickBooks Payroll

For direct deposit of QuickBooks Payroll, the following is the usual processing timeline:

Payroll is authorised, and details about direct deposit are forwarded to Intuit.
The payroll is delegated.
On the paycheque date, funds are deposited.

Payroll is Authorised, and Details about Direct Deposit are Forwarded to Intuit.

As at this point in the processing timeframe, the transaction is marked as pending. If any pay cheques need to be voided or additional pay cheques need to be sent, payroll information must be sent to Intuit by 5:00 PM (PT) at least two banking days prior to the pay date. Take note that if your Payroll account was set up with lengthier lead periods, then you might need to allow extra time.

The Payroll is Delegated.

After offloading, the payroll for direct deposit is electronically transmitted to the Automatic Clearing House of Intuit for processing.
One banking day prior to the pay cheque date, Intuit will debit your bank account.
Your bank account may be debited at any point during the course of the next 24 hours.

On the Pay Cheque Date, Funds are Deposited.

The monies must be posted to the employee’s bank account by 11:59 PM PT (2:59 AM ET) on the day of the cheque. It is not within Intuit’s authority to determine when the employee’s bank posts the direct deposit or makes the funds available.

On the following banking day, the cash will be credited to the employee’s bank account if the pay cheque date falls on a non-banking day.

Conclusion

We really hope that this article is helpful for you in finding the answers to your questions. Before setting up payroll direct deposit in QuickBooks Online, make sure to review all of the Steps for important considerations. Speak with our specialists for more details.

To know about How to Set up Direct Deposit in QuickBooks Payroll, click here. Also, to get knowledge about QuickBooks solutions, read our other blog related How to Write Intuit QuickBooks Payroll Direct Deposit Form.

Accounting Professionals, CPA, Enterprises, Owners

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Frequently Asked Questions

Can a Payment made by Direct Deposit be Cancelled once it has been Sent?

At least two banking days prior to the pay cheque date, Intuit is unable to halt the direct deposit transaction process after 5:00 PM PT (8:00 PM ET). For instance, you have until 5:00 PM (PT) on Wednesday to remove a pay cheque that was planned for direct deposit on Friday for an employee. Should you postpone until beyond this specified time and date, the funds will have already been moved.

You can delete the pay cheque and keep the money in your account even if you have already approved it if Intuit has not yet processed it.

Can Money that has already been Deposited into a Current Employee’s Bank Account be taken out by Intuit?

An existing employee’s bank account cannot have money taken out by Intuit. After resolving the issue with your employee directly, get in touch with Intuit so we can remove the pay stub on your behalf.

Is there any Limit on an Account If you Make Direct Deposit Payments?

To prevent fraud, there is a limit on the amount of money you can transfer using direct deposit into your account. Nonetheless, you are entitled to an increase if your payroll is more than usual due to factors like bonuses and salary increases.

How Can I Permanently Delete Direct Deposit From An Employee’s Profile?

If the employee is not paid, you can take the direct deposit out of the setting.

First you have to navigate to the Employees and then select the Employee Centre from it.
Double-click on the name of the employee whom you wish to change and then select the tab labeled for the Payroll Information.
Now select the Direct Deposit option.
The employee in question should finally have the item labeled and unchecked the Use Direct Deposit option.

How Can I Change a Worker’s Direct Deposit Details?

Before creating a paycheck for the employee, you must make changes to their bank account information. Before the employee’s account information is changed, checks will be sent and directly deposited into the previous bank account.

The procedures listed below can help you avoid this by removing and reformatting the paychecks prior to forwarding them to Intuit:

First of all, open your paycheck.
Proceed to the Paycheck Detail window next.
Next, make sure you deselect the “Use Direct Deposit” option.
Click the Save button, and then choose the Save & Close option.
Lastly, Attempt to open a paycheck by selecting the Use Direct Deposit option and then clicking Save.