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Contractor direct deposit

Learn the answers to frequently asked questions about contractor direct deposit in QuickBooks Online Payroll and QuickBooks Full Service Payroll.

With an active payroll subscription, customers can pay contractors via direct deposit.

What's new?

  • Good news—You can now select a future payment date in QuickBooks Online Payroll, avoiding the need to log in on specific dates, reducing missed payments.

To schedule a contractor payment on a future date:

  1. Select Workers, then Contractors.
  2. Choose contractor's name, then select Pay with direct deposit.
  3. On the Contractor payment window, complete the normal payment flow, then select your preferred pay date from the calendar.


  • Also, you can now pay your contractors fast and on time with 24-hour direct deposit. Below's the lead time to guide you on scheduling your pay date.
QuickBooks Full Service Payroll: Same day processing, given that all direct deposit payrolls are submitted and approved before 7:00 AM PT Friday (assuming Friday is the payday). QuickBooks Online Payroll: 24-hour direct deposit, given that all direct deposit payrolls are submitted before 5:00 PM PT, 1 banking day before the pay date.


You need to subscribe to QuickBooks Online Payroll (any version) to use this feature.

Note: If you have an inactive W-2 employees or no employees at all, you still need to have a subscription to pay contractors with direct deposit.

No, you can only use one bank account for all direct deposit transactions.
Yes, you need to complete the direct deposit setup before you can use this feature.
  1. Select Expenses > Expenses.
  2. Select the transaction that you want to view.
  1. Select Expenses > Vendors.
  2. Select the contractor/vendor that you want to view.
  3. Under the Transaction No field, select the transaction that display DD.

Note: We do NOT support direct deposit deductions for contractors such as deduction for cash repayment.


On top of your monthly payroll subscription, an additional surcharge will be added to your billing. This per-contractor, per month fee is the same as the per active employee fee in your QuickBooks Online Payroll subscription. You're able to issue as many direct deposit payments to a contractor as needed with just this flat fee.

No, our system will be able to identify if you have run a direct deposit payment for that contractor.

No, you will only be charged if you have run direct deposit payments for you contractors.

That is a possibility. Please be sure to review this feature with your clients. Determine if they are interested in using it before incurring any fees.

Timing and process

  • No, if the payment has been processed.
  • Yes, if the payment is still pending.

The funds will be debited out of your bank account on your scheduled pay date.

If you date your paychecks for... Send payroll by 5:00 PM PT on... Your account will be debited on... Contractors get paid on (Direct Deposit only)...
Friday Thursday Friday Friday
Monday Friday Monday Monday
Tuesday Monday Tuesday Tuesday
Wednesday Tuesday Wednesday Wednesday
Thursday Wednesday Thursday Thursday

Note: For QuickBooks Online Payroll Full Service, direct deposit payrolls can be submitted and approved up until 7:00 AM PT Friday (assuming Friday is the payday).

Contractor direct deposit is scheduled to post on the pay date.

QuickBooks Online Payroll Full Service, QuickBooks Online Payroll Premium and QuickBooks Online Payroll Elite: Same day processing, given that all direct deposit payrolls are submitted and approved before 7:00 AM PT Friday (assuming Friday is the payday)QuickBooks Online Payroll Enhanced and QuickBooks Online Payroll Core: 24-hour direct deposit, given that all direct deposit payrolls are submitted before 5:00 PM PT, 1 banking day before the pay date.

Yes, customers and contractors receive email confirmation when:

  • Direct deposit payment is scheduled and settled
  • Intuit fails to debit from funding account (Customer only)
  • Intuit fails to credit to posting account (Customer only)

Contact customer support for assistance.

Yes, the Transaction No field will display DD on the expense record, if the transaction was made via direct deposit.

No, at this time you must be using a desktop browser with QuickBooks Online to create contractor direct deposits.


When a contractor is paid it will reflect in the check register. When downloading transactions from your bank, we will attempt to match the transaction. There remains the possibility that if it is not matched, a duplication could occur.

Yes. You can now assign a class, and a customer or project when creating a contractor direct deposit.

When assigning a project, enter the project name in the customer field.

At this point we do not support file attachments for direct deposit payments. In the future, we will work on the ability for employers to attach an invoice to a payment record.

At this time we do not support this capability in contractor direct deposit.

  1. Select Expenses > Vendors.
  2. Select a vendor and the desired direct deposit expense from the Transaction List.
  3. Under Add to Expense, select Add.
    Add direct deposit expense to vendor bill in QuickBooks Online
  4. Add the amount of the DD expense and select Save.
    Add direct deposit amount and click save in QuickBooks Online
  5. Review the changes in Amount to Apply and Amount to Credit. Then Save and close.
    Review changes to direct deposit expense amount in QuickBooks Online
  6. The customer's open balance will be reduced.


You have two options to add your funding bank account information:

Option 1 - Through employee setup

See Enroll in direct deposit (DD) for more details.

Option 2 - Through contractor setup

  1. Select Workers > Contractors.
  2. Under the price select Get Started.
  3. Select Set up direct deposit.
  4. Select Add bank. Enter your banking credentials or bank account information.
  5. After entering bank information, a test transaction must be entered to verify bank account on file. If a bank account was connected with your banking credentials, you will not see this prompt.Review direct deposit bank credentials in QuickBooks Online
  1. Select Workers > Contractors.
  2. Choose the contractor's name.
  3. In the contractor's profile, select Change bank under Payment details.
  4. After updating the bank information select Save.Change contractor’s direct deposit bank information in QuickBooks Online
  1. Select Workers > Contractors.
  2. Choose the contractor's name.Note: The drop-down for Pay with direct deposit will show if bank account is already added to contractor's profile.
  3. Select Add Bank.Set up direct deposit payment for contractors in QuickBooks Online
  4. Enter contractor's bank account information, then choose Save.
  1. Select Workers > Contractors.
  2. Choose Write check from the drop-down on the contractor's name that you would like to pay, then select Pay by Direct deposit.Note: If you have already setup for direct deposit, Pay by direct deposit will be your default option.
  3. Enter the needed information, then select a Category for the payment.
  4. Select a Corresponding account in QuickBooks.Note: This is the account inside your chart of accounts that this transaction will post to. Not the account we will debit from. This account must be classified as a Checking account in QuickBooks Online.
    Create a contractor direct deposit payment in QuickBooks Online
  5. Select Pay beside the total amount.
  6. A confirmation message will pop up, then select Yes, let's proceed to confirm payment.
  7. Contractor payment details will show, then select Close.

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