Overview

When you send your Direct Deposit payroll to Intuit for processing, the following happens:

  • Intuit's payroll system posts a QuickBooks Liability Check in your bank register for the total amount of Direct Deposit payroll plus processing fees.
  • Intuit will debit your bank account for the total amount on that liability check, a banking day before the paycheck date.

To ensure that your employees receive their direct deposit funds on paycheck date, you must send your payroll before 5 p.m., Pacific Time, two federal banking days prior to your paycheck date.

Assumptions

You have an active payroll subscription and transmits direct deposit payroll to Intuit.

Details

Why do Direct Deposit paychecks appear as zero amounts in my QuickBooks bank register?

When you send your Direct Deposit Payroll to Intuit for processing, a QuickBooks Payroll Liability Check is auto generated and posted to your bank register by the payroll system. This liability check reduces the balance in your QuickBooks bank register for the sum total of all direct deposit paychecks and their associated processing fees. Because the net amounts on Direct Deposit paychecks are already included in the QuickBooks Liability Check, any Direct Deposit paycheck will display on your bank register with a zero net amount.

The total amount of Direct Deposit amounts debited by Intuit for a payroll period is the amount of your Direct Deposit Liability for that same period.

Why do Direct Deposit paychecks show as cleared in my QuickBooks bank register?

The direct deposit checks show as cleared because Intuit debits the total amount of all the net direct deposits for bank processing and posting to your employees' bank accounts.

With this method, you don't need to mark each direct deposit as cleared manually in the register. The checks are showing the amount $0 in the check register window to avoid duplicating the amount of debit that is included on the QuickBooks Payroll Service liability check. Because the amount on each Direct Deposit paycheck shows zero, QuickBooks automatically show this as a cleared transaction.

Example: The balance in your company check register is $10,000. You create two direct deposits for $1,000 each after taxes. The fee for the direct deposits is a total of $3.00. Both direct deposits will show zero amounts in the payment column of the check register. After transmitting the payroll, you'll see a QuickBooks Payroll Service liability chequefor $2,003, which reduces your balance to $7,997, as shown in the balance column.