There are a few things to consider before running direct deposit payroll with QuickBooks Online.
  • You must approve pay cheques that are being paid through direct deposit by at least 5 pm Pacific Time, two banking days before the pay date.
  • It can take up to three days to complete the Risk Analysis after initial set up.
  • Double check 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 Master Administrator (MMA) on file, but the AML/OFAC email and the verify bank account email will go to both the Principal Officer (bank owner) & the MMA.
  • Most companies will receive an AML/OFAC email from requesting proof of identification and more info. The Principal Officer must respond to this email with the appropriate documentation prior to using direct deposit and it can take up to 2 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 set up

  1. Select the Gear icon at the top, then Payroll Settings.
  2. Under Payroll, select Direct Deposit.
  3. Review what you'll need to set up direct deposit and select Yes! Let't get started.
  4. Fill in required fields for Employer Bank Account and Account's Principal Officer. 
  5. Select Continue.
  6. You'll receive a confirmation email from prompting you to verify your information. Once the information is verified, you'll receive another email confirming your pre-authorized debits.

Verify your Direct Deposit test transaction

In 2-3 business days, a small debit of less than $1.00 (CAD) will be taken from your account as a test. To verify this amount:
  1. Select the Gear icon at the top, then Payroll Settings.
  2. Select Direct Deposit, then Verfiy Test Transaction. (Note: This option will not be available until the test amount has been debited.)
  3. Enter the test transaction amount in both boxes (less than $1.00). Enter the pennies only, without a dollar sign. (i.e. .47)
  4. Select OK.
  5. After successful verification, you're ready to set up employees!
You have 3 attempts to verify your test transaction. If you aren't successful, contact us for assistance. 

Set up each employee on direct deposit

Once you've completed initial set up, your direct deposit settings screen will look like this:

User-added image
  1. Ensure the employee has properly filled out the Direct Deposit Authorization Form. 
  2. Select Set Up beside the desired employee.
  3. From the What do you use to pay Employee? drop-down arrow, choose Direct Deposit.
  4. Fill in the fields using the information from the employee's authorization form.
  5. Select OK.
  6. This completes the set up process and you're now ready to use direct deposit to pay your employees.
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