How to set up payroll direct deposit in QuickBooks Online

To set up payroll direct deposit, you must first enter your business, bank account, and Principal Officer information. After this initial setup, you will need to verify two small test transactions in your bank account. Once your account is verified, you can set up each employee for direct deposit.

What to know before you start

Before setting up direct deposit, note these important details.

Approval Timelines: You must approve paycheques that are being paid through direct-deposit based on your direct-deposit payment speed:

• Next-day model: Approve payroll by 5 PM PT (8 PM ET) the day before payday.
• 2-day model: Approve payroll by 5 PM PT (8 PM ET) at least 2 business days before payday.
• 5-day model: Approve payroll by 5 PM PT (8 PM ET) at least 5 business days before payday.

Setup and Verification Timeline

• The entire direct deposit setup and verification process can sometimes take up to a week.
• After you submit your information, it can take up to 3 days to complete the risk analysis.
• A best practice is to start the setup the day after running payroll with paper cheques. This helps ensure your account is not in a "Pending" state when it's time for your next payroll.

Roles

• The Principal Officer is the owner of the bank account being set up.
• The Primary admin is the person on file who will receive email communications for direct deposit.
• Both the Principal Officer and the Primary admin will receive the "ID verification" email and the "verify bank account" email.

Identification (ID) Verification

• Most companies will get an "ID verification" email from notify@Quickbase.com requesting proof of identification.
• The Principal Officer must respond to this email with the required documentation before direct deposit can be used.
• It can take up to 2 business days to approve the identification after it is submitted.
• To learn more on how to upload your government identification, see this article.

Information Accuracy

• Always confirm that all account numbers and information are correct.
• Incorrect information may cause a delay or result in funds not being sent to an employee.

Part 1: Enter your bank account information

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 will receive a confirmation email prompting you to verify your information by uploading a copy of your identification.

Part 2: Verify the test transaction

You must verify test transactions after the initial setup. Within 2-3 business days, two small debits (less than $1.00 CAD each) will be charged to your account.

How to verify the amounts

The option to verify becomes available 24-48 hours after you enter your bank account information.

1. Select the Settings ⚙️ icon, then Payroll settings.
2. Select the edit icon next to Bank accounts, then select Verify your account.
3. Enter the two test transaction amounts (cents value only, without a dollar sign, e.g., 47 for $0.47).
4. Select Verify.

After successful verification, you are ready to set up your employees.

What to do if you don't see the test transactions

If you do not see the transactions within 3 business days, follow these steps to trigger them 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 and select verify 3 times. This fails the test transaction and lets you add the banking information again.
4. Go back to Payroll Settings and select the Edit button next to the Bank Account field.
5. Re-enter the correct bank account information.
6. Select Continue to save changes.
7. This should trigger QuickBooks Online to send the test transaction. Please wait another 3 business days for the transaction to appear.

Part 3: Set up employees for direct deposit

After your bank account is verified, you can set up each employee.

Follow this link to complete the steps in product.

1. Ensure the employee has completed the Direct Deposit Authorization Form. You can also access the direct deposit authorization form if your employee hasn't signed one.
2. Select the employee to set up for direct deposit.
3. Select Edit from Payment method.
4. Select Direct deposit from the Payment method dropdown menu.
5. Select a Direct deposit method. You can split deposits by a dollar amount or percentage:
   • Direct deposit to one account.
   • Direct deposit to two accounts.
   • Direct deposit with balance as a cheque.
6. Complete the fields using the information from the employee's voided cheque or authorization form.
7. Select Save.

This completes the set-up process.

Troubleshooting and next steps

Check processing times and limits

For information on the direct deposit processing timeline after you've submitted payroll, review the direct deposit processing timeline.

To check your specific direct deposit limits and processing times, visit Get help if you’re over a direct deposit limit.

What if my account is still not active?

If your account is not active, it may be due to one of these situations:

• You entered an invalid bank account.
• Your bank account had a zero balance, and we couldn't initiate the test transaction.
• You entered an incorrect test transaction amount.

If one of these issues occurs, you will receive an email from notify@quickbase.com with instructions. Otherwise, contact Payroll Support for assistance.

Money movement services are provided by Intuit Canada Payments Inc.