How to Verify & Set Up Direct Deposit in QuickBooks Payroll

Set Up Direct Deposit in QuickBooks Payroll

Last Updated on February 16, 2021 by Editorial Team

As we know that direct deposit saves valuable time in Payroll. So every QuickBooks users want to pay their employees through direct deposit. It also helps you to manage all your track inventory which contains completed information in the form of statements. So, here we have the article for you to set up direct deposit in QuickBooks Payroll. Let’s know, how to do it.

Important Points Must be Noted About Direct Deposit

The important points you should know about the direct deposit are:

  • Approval of payment cheques which are paid by the direct deposits at least 5pm PST of the two banking days before the pay date.
  • Three days time can be taken for completing the Risk analysis after the initial setup.
  • You have to check the account number and information again because it should be correct as incorrect information may cause a delay or result in funds which are not sent to an employee.
  • To begin the direct deposit set up you can start after running a payroll with paper cheques for ensuring that you are not in a Pending state when you will start running the next Payroll. Many time it used to take up to a week for set up and for verification.
  • The owner of the bank account is the Principle officer for setting up for the direct deposit.
  • Email communication will be sent to the master administrator on file but AML/OFAC email and then verify bank account email will be sent to both Principle officer and the master administrator.
  • Principle officer will be surely responding to this email with the appropriate documents prior and this process will take 2 business days for approving the ID is submitted.

Procedure to Verify a Direct Deposit Test Transaction

Once you are done with the initial set up you should verify a test transaction direct deposit for must. In this process, a small amount of less than $1.00 will be debited from your account within 1 to 2 working days as a test. Here how you can verify this amount:

  1. Go to the Settings icon, then click on the Payroll Settings.
  2. Then you have to go to the Payroll setting, and then choose Direct Deposit.
  3. Click to Verify Test Transaction. 
  4. Fill out the test transaction amount in both boxes. Make sure to enter pennies only, and not having any dollar sign. (i.e. 38)
  5. Click on Ok.
  6. Once verification is done, you are good to set up employees.

In case you do not see this transaction within the 3 working days of entering direct deposit details from your Payroll Settings. The given below steps you can take to re-trigger the verification of the test:

  1. Go to the Settings icon, then click on the Payroll Settings.
  2. From the Payroll setting, chose Direct Deposit.
  3. Click on Yes! Let’s get started.
  4. Choose the Edit option that is next to the Bank Account field.
  5. Fill out the following given number in a sequence into the bank account field: 123456789.
  6. Click on Save and close.
  7. Now directly go back to the Payroll Settings from the Gear icon and click on Direct Deposit.

Procedure to Set Up Direct Deposit

All the given steps are very easy and simple so you can set up a direct deposit. If you want the instant solution you can contact our QuickBooks Support team. Our expert team solved all types of queries.

Step 1: Enter Company Details

First, verify your company information, including legal name, address, EIN and, industry.

Step 2: Enter your Bank Information

Next, you have to enter your business bank information. Then select the bank account from which you want to pay employees. Indicate whether it is a checking or savings account and enter the legal name, routing number and, account number associated with the bank account. Finally, you have to agree to the terms and conditions which are present at the bottom of the screen.

Step 3: Set Security Limits

As an additional security measure, QuickBooks will now enter you into three security checks. Use the drop-down menu and choose the most accurate option for the business.

Step 4: Activating your DD Account

You need to verify your bank account and then QuickBooks will be charging only two small verification amounts. When these charges will be deducted you can see them in your banking records and you can officially activate your direct deposit amount.

Step 5: Just Verify the Direct Deposit

  • Once you have noticed two verification charges in your bank records, you need to activate Employee
  • After that, you have to go to My Payroll Services and then click on Direct Deposit.
  • Now you have to input the two amounts and then click on Next to verify your bank account.

Step 6: Enter Employee Direct Deposit Details

Click Use Direct Deposit for this Employee box and enter the following details: bank name, account number, account type, and routing number. You can also choose whether to deposit the entire amount directly or divide the amount. When done, click OK and then click OK on the Employee screen to save the information correctly.

Step 7: How to Run Payroll Using DD

When you have entered the employee direct deposit details after then you are ready to run the Payroll using direct deposit. Now you need to follow the instructions given first to run the payroll. When you arrive at the last screen, send it to your employees to pay via direct deposit.

Step 8: Enter Direct Deposit PIN

Direct deposit pins are helpful for security purposes. You will be provided with a direct deposit PIN which you will have to input to verify the transaction. this will make sure of the security breach.

Step 9: Print Pay Stubs

Now if you have paid to your employees using direct deposits, then you do not forget to print the payment stubs. To print pay stubs in QB payroll – go to File, then Print Forms and then Pay Stubs.

How to Edit Direct Deposit Information

  • You should enter your direct deposit PIN when notified.

You must edit the bank account information before creating a paycheck for the employee. Paychecks created before you updated the employee’s account information will be deposited to the old bank account. If you want to avoid this, you can follow these steps such as:

  • First of all, open the paycheck and navigate to the Paycheck Detail window.
  • Then uncheck the Use Direct Deposit option on the paycheck detail.
  • Click Save and then select Save & Close.
  • Again open the paycheck and choose the Use Direct Deposit option.
  • After that, make sure to save it.

How to Remove Direct Deposit

  • Firstly, select Employees and then click on Employee Center.
  • Then you have to double-click on the name of the employee which you want to edit.
  • After that, you have to click on the Payroll Info tab.
  • Then click on the Direct Deposit button. 
  • Now select to clear the box Use Direct Deposit for this employee.

Frequently Asked Questions

1. Do direct deposits have limits

Ans In order to protect against fraud, your account have a limit on the amount of money you can send with direct deposit. If you are also planning on running a larger than normal payroll for things such as bonuses or pay raises, in that case you can also request an increase.

2. Can I pay anything else with direct deposit

Ans You can only use Intuit’s direct deposit services to pay your employees or contractors. If you want to pay any other company expenses, then you will need to use another method of payment. In case of contractors, you can only pay direct deposit into a single savings or checking account.

Final Words

In this blog, there are some steps that guide you on how to set up your Direct Deposit in QuickBooks Payroll. This blog will be helpful for your business and your queries. If in case you are unable to set up the direct deposit you can hire a QuickBooks ProAdvisor for the best solution.

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