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How do federal holidays affect my direct deposit?

by Intuit•525• Updated 4 weeks ago

Learn how to make sure your employees get paid on time when there’s a holiday.

Holidays can affect your paydays and when you need to send your payroll. Weekends and federal holidays are non-banking days. Additionally, banks often close on state holidays. You’ll want to double-check with your bank for any state holidays they observe.

Step 1: Check the federal holiday schedule

Here are the federal holidays. Check the dates for the observed holidays.

New Year's Day
Birthday of Martin Luther King, Jr.
Washington's Birthday / Presidents' Day
Memorial Day
Juneteenth National Independence Day
Independence Day
Labor Day
Columbus Day / Indigenous Peoples' Day
Veteran's Day
Thanksgiving Day
Christmas Day

Step 2: Determine when to send or approve payroll

Choose your payroll product to learn more how holidays affect your send times.

Note: Make sure to allow for your specific lead time for your payroll service.

Note: Not sure which payroll service you have? Here's how to find your payroll service.

QuickBooks Online Payroll Core

For a better experience, open this article in QuickBooks Online. Launch side-by-side view

With QuickBooks Online Payroll Core, you may have a 1-day lead time or a 5-day lead time. This means you need to send your payroll before 5:00 PM PT 1 business day prior to payday with a 1-day lead time or 5:00 PM PT 5 business days before payday.

Direct deposit timing for holidays

Does payday fall on, or the day after, a holiday? Send your payroll one business day earlier than you normally would.

The money will be drawn from your account before regular banking hours the next banking day. Make sure your account has funds to cover the payroll on the day before the draw takes place.

What does a 1-day and 5-day lead time and holiday look like?

Let’s look at an example. If your payday falls on a Monday holiday, approve your paychecks by the prior Thursday. Your account will then be debited on Friday. Your employees will see their money on Friday.

Keep in mind that a Monday holiday will also affect a Tuesday payday. If payday is the day after a holiday, send your payroll one day earlier than usual.

If you have a 5-day lead time, you'll need to give yourself an extra day. Instead of submitting payroll on the Friday before payday, you'll need to submit payroll on the Thursday of the previous week.

QuickBooks Online Payroll Premium and Elite

For a better experience, open this article in QuickBooks Online. Launch side-by-side view

With QuickBooks Online Payroll Premium and QuickBooks Online Payroll Elite, you have same day direct deposit or a 5-day lead time.

Direct deposit timing for holidays

When you approve your paychecks before 7:00 AM PT on the day before the holiday, your money will draw from your account the same day. Your employees will see the money by 5:00 PM local time per NACHA rules.

But if you approve your paychecks before 5:00 PM PT the business day before payday, we’ll process the direct deposit and debit your account the day before payday. Your employee will receive the funds the next day.

Be sure you have funds in your account to cover the payroll on the day it’s sent.

What do same-day deposits and a holiday look like?

Let’s look at an example. If your payday falls on a Monday holiday, approve your paychecks on the prior Friday by 7 AM PT. Your account will be debited on Friday and your employees will get paid on Friday.

What do 5-day funding time and a holiday look like?

If you have a 5-day lead time, you'll need to give yourself an extra day. Instead of sending your payroll on the Friday before payday, you'll need to send payroll on the Thursday of the previous week.

QuickBooks Desktop Payroll Assisted

With QuickBooks Desktop Payroll Assisted, you'll have a 1-day lead time. This means you need to submit your payroll before 5:00 PM PT 1 business day prior to payday.

Direct deposit timing for holidays

Does payday fall on, or the day after, a holiday? Send your payroll one banking day earlier than you normally would.

The money will be drawn from your account before regular banking hours the next banking day. Make sure your account has funds to cover the payroll on the day before the draw takes place.

What does a 1-day lead time and holiday look like?

Keep in mind that a Monday holiday will also affect a Tuesday payday. If payday is the day after a holiday, send your payroll one day earlier than usual.

QuickBooks Desktop Payroll Basic, Standard, and Enhanced

These services have a 2-day lead time. You need to send your payroll by 5:00 PM PT 2 business days prior to payday.

Direct deposit timing for holidays

Does payday fall on, or two days after, a holiday? Send payroll one banking day earlier than you normally would.

The money will be drawn from your account before regular banking hours the next banking day. Make sure your account has funds to cover the payroll on the day before the draw takes place.

What does 2-day lead time and a holiday look like?

Let’s look at an example. If your payday falls on a Monday holiday, approve your paychecks by the prior Wednesday. Your account will then be debited on Thursday. And your employees will see the money on Friday.

A Monday holiday will also affect a Tuesday and Wednesday payday. If payday falls on the two days after a holiday, send payroll one day earlier than usual.

What happens if I send payroll after the cutoff time?

If you've missed the cutoff time, your direct deposit will process the next banking day. This means your employees will get paid a day later. If you would like to pay them on time, you have the option to issue a paper check instead.

QuickBooks Desktop Payroll AssistedQuickBooks Desktop Payroll BasicQuickBooks Desktop Payroll EnhancedQuickBooks Desktop Payroll StandardQuickBooks Online Payroll CoreQuickBooks Online Payroll EliteQuickBooks Online Payroll Premium

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