Navigating Direct Deposit Limits in QuickBooks Payroll: A Complete Guide
There are direct deposit limits on QuickBooks Payroll. Find out how to manage these limits effectively. Follow our comprehensive guide to ensure timely payments and seamless payroll processing.
Direct deposit is a convenient way to ensure your employees and contractors are paid promptly. However, for security reasons, there are limits on the amount of money you can send via direct deposit. This article explains how these limits affect QuickBooks Online Payroll and QuickBooks Desktop Payroll and what steps you can take to avoid difficulties at payroll time.
What are direct deposit limits?
Direct deposit limits refer to the maximum amount of money that can be transferred from your business account to your employees' or contractors' accounts in a set period. These limits help prevent fraud and ensure that your account has sufficient funds.
Understanding your limits in QuickBooks Online Payroll
In QuickBooks Online Payroll, you might encounter a message stating that your payment amounts are more significant than usual. This message appears when your direct deposit amount exceeds the set limits. These limits are determined per payroll and per person:
Per Payroll: The total amount of direct deposits for all employees or contractors paid within a six-day period.
Per Person: The direct deposit amount for one employee or contractor paid within a 14-day period.
Finding your limits
To check your direct deposit limits:
Go to Settings ⚙
Select Payroll Settings
Look for the Direct Deposit section and select Edit ✎ to view your limits
Requesting an increase
If your payroll amount often exceeds your limits, you can request an increase:
Go to Settings ⚙ and select Payroll settings
In the Direct Deposit section, choose Edit ✎
Select Request Limit Increase
Enter the necessary amount and type of increase, then select Done and Save
Requests are typically reviewed within two business days. You may need to provide bank statements to show that your account has sufficient funds. Upload these documents through the Resolution Center in Payroll Settings.
Understanding your limits in QuickBooks Desktop Payroll
Similar to QuickBooks Online, QuickBooks Desktop Payroll has direct deposit limits. If your payment exceeds these limits, you will receive an error message.
Finding your limits
To find your direct deposit limits in QuickBooks Desktop Payroll:
Open QuickBooks Desktop
Go to Employees > My Payroll Service > Account/Billing Information
Look for the Direct Deposit section to view your limits
Requesting an increase
To request an increase in your direct deposit limits:
Open QuickBooks Desktop and go to Employees > My Payroll Service > Account/Billing Information
Select Request Limit Increase
Follow the prompts to submit your request and provide any required documentation
What to do if you need to pay employees today
If you need to pay employees immediately and your direct deposit limit prevents you from doing so, you can issue paper checks. Here's how to switch to paper checks:
For employees:
Go to the payroll section in QuickBooks
Select the employees you need to pay
Turn off the direct deposit option for these employees
Print and issue paper checks
For detailed steps, visit Change direct deposit to paper check for employees.
For contractors:
Go to the payroll section in QuickBooks
Select the contractors you need to pay
Turn off the direct deposit option for these contractors
Print and issue paper checks
For detailed steps, visit Pay a contractor with a paper check.
Bottom line
Managing direct deposit limits in QuickBooks Online Payroll and QuickBooks Desktop Payroll is essential to ensure smooth payroll processing. By understanding your limits and knowing how to request increases, you can prevent disruptions in paying your employees and contractors. Always stay informed of your payroll settings and be prepared to switch to paper checks if necessary to avoid any payment delays.
For more information and detailed steps, refer to the official QuickBooks support articles linked above or contact Peak Advisers (303) 801-4772.
QuickBooks Payroll upgrade improves employee banking flexibility
The newest QuickBooks Online Payroll upgrade allows employees to update their direct deposit information via QuickBooks Workforce easily. Learn how this improves flexibility, security, and efficiency in payroll management for small businesses.
Starting June 13, 2024, QuickBooks Online Payroll will offer a significant upgrade that empowers employees with a more flexible way to manage their direct deposit information. This new feature, accessible through QuickBooks Workforce, will streamline how your staff updates their banking details, making payroll processes smoother and more efficient for small businesses. Here’s everything you need to know about these changes and how they can benefit employers and employees.
Critical Changes to QuickBooks Payroll Direct Deposit Management
Direct Edit by Employees
Employees paid exclusively via direct deposit will soon be able to update their bank information directly from their profile in QuickBooks Workforce online. This change means:
Ease of Access: No need to pass through HR to update banking details.
Secure Authentication: Employees will verify their identity to make changes, ensuring security.
Immediate Updates: Changes are reflected immediately in QuickBooks Payroll, keeping records accurate and up-to-date.
Notifications for Employers
Employers will automatically receive an email notification when employees update their banking details. This helps maintain transparency and allows for prompt attention to any potential discrepancies.
Peak Advisers can help you implement and use the right QuickBooks tools to make managing your business easier. We’re happy to discuss how products like QuickBooks Payroll Online can improve your operations. If you’re already a QBO Payroll user, we can also help you implement the new upgrade.
Customization Options for Employers
Employers have the option to control whether employees can change their banking information:
Navigate to Settings ⚙, then Payroll Settings.
In the Employee Profile Management section, click Edit ✎.
Uncheck Allow Employee to Edit Bank Information if you prefer to maintain control over these changes.
Click Save to apply the settings.
Benefits for QuickBooks Online Payroll Users
For users of QuickBooks Online Payroll, this update is particularly advantageous:
Flexibility: Employees can choose one or two accounts for their direct deposits and specify the percentage of their paycheck that goes into each.
Simplicity: Streamlines the payroll management process, reducing administrative workload.
Note for QuickBooks Desktop Payroll Users
It’s important to note that this feature is not available in QuickBooks Desktop Payroll. Employees using this system will not have the option to update their direct deposit settings through QuickBooks Workforce.
Step-by-Step Guide for Employees
Here’s how employees can update their banking information in QuickBooks Workforce:
Sign in to QuickBooks Workforce.
Navigate to Profile.
In the Paycheck preferences section, click Edit ✎.
Add or update your banking details.
Save your changes.
An email confirming changes will go to you and your employer.
Making things easier for everyone
This update from QuickBooks Payroll will make payroll management more user-friendly and efficient, reflecting QuickBooks’ ongoing commitment to improving user experience.
QuickBooks Online Payroll’s new features make it an even more appealing option for small businesses looking for a reliable, easy-to-use payroll solution. Whether you’re an employer or an employee, these changes offer greater control and flexibility, simplifying how payroll is managed in your organization.