How to set up payroll direct deposit

You can easily set up payroll direct deposit in QuickBooks Online. After the initial set up you can put each employee on direct deposit and also verify a test transaction.

Things to be aware of

Here are some things to note about direct deposit:

• You must approve paycheques that are being paid through direct deposit by at least 5:00 PM PST, two banking days before the pay date.
• It can take up to three days to complete the Risk Analysis after initial the set up.
• Confirm that all account numbers and information are correct. Incorrect information can cause a delay or result in funds not being sent to an employee.
• A best practice is to begin direct deposit set up the day after running a payroll with paper cheques to ensure you are not in a "Pending" state when it’s time to run your next payroll. Direct deposit set up and verification can sometimes take up to a week.
• The Principal Officer is the owner of the bank account being set up for direct deposit.
• Email communications for direct deposit will be sent to the Primary admin on file, but the AML/OFAC email and the verify bank account email will go to both the Principal Officer (bank owner) and the Primary admin.
• Most companies will receive an AML/OFAC email from notify@quickbase.com requesting proof of identification and more information. The Principal Officer must respond to this email with the appropriate documentation prior to using direct deposit; it can take up to two business days to approve once the ID is submitted.

Note: Review the direct deposit processing timeline for information on how long the direct deposit process will take once you've submitted payroll.

Initial setup of direct deposit

1. Select the Settings ⚙️ icon, then Payroll settings.
2. Select Bank Accounts.
3. Complete the required fields for your Business, Principal Officer, and Bank account.
4. Select Save.

You'll receive a confirmation email prompting you to verify your information. Once the information is verified, you'll receive another email confirming your pre-authorized debits.

Verify a direct deposit test transaction

It is necessary to verify a direct deposit test transaction after the initial set up. A small debit of less than $1.00 (CAD) is charged to your account as a test within 2-3 business days.

To verify this amount:

1. Select the Settings ⚙️ icon, then Payroll settings.
2. Select the edit icon next to Bank accounts, then select Verify your account.This option becomes available 24-48 hours after the bank account information is entered.
3. Select Verify Test Transaction. This option will not be available until the test amount has been debited.
4. Enter the test transaction amount in both boxes (less than $1.00). Enter the cents only, without a dollar sign. (for example, 47 for $0.47)
5. Select Verify.

After successful verification, you're ready to set up employees.

If you don't see this transaction within 3 business days of entering direct deposit information into your Payroll settings, follow these steps to trigger the test transaction again:

1. Select the Settings ⚙️ icon, then Payroll settings.
2. Select the edit icon next to Bank accounts, then select Verify test transaction.
3. To reset the test transaction, enter $0.01 in the boxes below and select verify 3 times. Doing this will fail the test transaction and let you add the banking information again.
4. Go back to Payroll Settings and select the Edit button next to the Bank Account field.
5. Reenter the correct bank account information.
6. Select Continue to save changes.

This should trigger QuickBooks Online to send the test transaction to your bank. Please wait another 3 business days for the transaction to appear in your bank account.

Set up each employee on direct deposit

After your direct deposit test transaction has been verified, you're ready to set up each employee:

1. Ensure the employee has completed the Direct Deposit Authorization Form.
2. Select Payroll, then Employees on the left-side navigation bar.
3. Select the employee that you would like to set up for direct deposit.
4. Edit the Payment method and select Direct Deposit from the drop-down menu.
5. Complete the fields using the information from the employee's authorization form.
6. Select Save.

This completes the set up process. You're now ready to use direct deposit to pay your employees.

What if my account still isn't active for direct deposit?

This may be caused by one of the following situations:

• You entered an invalid bank account.
• We weren't able to initiate the test transaction because your bank account had a zero balance.
• You entered an incorrect test transaction amount.

Should one of these situations arise, we'll send you an email with instructions for resolving it. The sender will show up as notify@quickbase.com. Otherwise, contact Payroll Support for assistance.