QuickBooks Payroll Direct Deposit Not Working: Top Methods to Fix It

Have you been stuck with the QuickBooks Payroll Direct Deposit Not Working issue while processing the payroll? If yes, then you don’t need to panic anymore. This issue usually strikes when the users try to process their payroll before the payday time set in the QuickBooks Payroll Direct deposit. Other factors that may cause this issue are an inactive payroll subscription, outdated QuickBooks, or using the incorrect bank details. In this post, we will guide you with all the possible causes along with the best solutions to fix QuickBooks direct deposit issues.

Table of Contents

Why Does the QuickBooks Direct Deposit Failed Issue Appear?

At times, users search for the query stating “I didin’t get paid on payday direct deposit”. This may happen due to numerous causes which we have explained below. Let’s understand all the causes carefully to find the proper solution for the query.

Issues at the end of the financial institution may prevent the users from processing the payroll.
There might be the possibility that the pay date you have chosen comes on a weekend or holiday.
You have mentioned the employee’s bank account details inappropriately.
In other instances, QuickBooks direct deposit issues may occur if your direct deposit payroll is submitted after the cutoff, that means 5:00 PM Pacific Standard time. If such a situation arises, then the payroll will be processed on the upcoming banking day.
Sometimes, the issue is seen when you are running the older QuickBooks or the payroll tax table.

Effective Ways to Fix the QuickBooks Payroll Direct Deposit Not Working Issue

With the help of the solutions discussed below, you can easily fix the QuickBooks Payroll Direct Deposit not working issue.

Method 1: Activate Direct Deposit in QuickBooks

You are supposed to activate the direct deposit feature in QuickBooks to run it. In case you haven’t activated it yet, then perform the instructions outlined below.

Activate Direct Deposit in QuickBooks- BizBooksAdvice

Launch the QuickBooks Desktop application and enter the F2 or Ctrl + 1 keys.
After this, hit the Ctrl + 2 key, and this will redirect you to the Tech Help window.
Now, choose the Open File tab and double-tap on the qbw.ini file to access it.
Once you see the text file, move to the [QBLICENSE] PAYROLL_BUNDLE_STATE=Y.
Herein, you must edit Y with N and then head to the File > Save option. Doing so will restore the qbw.ini file with the changes.
Thereon, return to the QuickBooks application and try accessing the WF Invites or PTC.
Once you are on the Payroll Activation window, do as per the instructions given above instead of changing Y to N. Then, remove the entire section : [QBLICENSE] PAYROLL_BUNDLE_STATE=Y].

Method 2: Verify & Confirm Direct Deposit Funding Time

At times, employee didn’t receive direct deposit QuickBooks Online if the direct deposit funding time is not set accurately. So, to rectify the issue, it is mandatory that the businesses must set their direct deposit funding times provided by Intuit listed below.

Same-Day: Under this, workers are paid on the same day you send the payroll to Intuit. You can access this option only in the Premium or the Elite Subscription of QuickBooks.
Next-day: Herein, the workers are paid the next banking day after sending payroll to Intuit.
2-day: The workers are paid right after two banking days after sending payroll to Intuit.
5-day: By choosing this option, the workers will get the payment after five banking days once payroll is sent to Intuit.

If you spot that the paychecks are not deposited by the time you wish, you have to ensure that the funding time is set accurately in QuickBooks. For that, do as follows:

Primarily, access the Gear () icon and choose the Settings option.
After this, you must scroll down to the Direct Deposit section.
Now, start reviewing the funding time right above the direct deposit limits.

Method 3: Setting Up the Company Payroll For Direct Deposit

If your payroll direct deposit rejected by bank then you must try to set up the direct deposit again in QuickBooks. For that, you must perform the below steps closely.

First Step: Collect Your Business, Bank & Principal Officer Details

For setting up the direct deposit of your company, you must have the following information:

Business name, address, and EIN
Principal officer’s Social Security number, birth date, and home address
Online bank credentials, or your company’s bank routing and account numbers
Employees’ or contractors’ bank account info

Second Step: Connecting Your Bank Account

Herein, you have the option to link your bank account through the Instant Bank Verification and utilize direct deposit for your team instantly.

QuickBooks Online Payroll

If you are a new user to the payroll, then do as follows.

Initially, you must log in to the QuickBooks Online Payroll account.
After this, choose the “Let’s Go” tab from the Connect your bank section.
Now, pick the Get Started option and hit the Edit menu from the Business.
Thereon, insert any missing details consisting of your federal tax ID number and hit the Next tab.
You must include the Principal Officer’s name, address, date of birth, and Social Security Number.
Next, you must tap on Add new bank account and start searching for your bank name. Herein, you will be prompted to mention the online banking User ID and password. Otherwise, you can pick Enter bank info manually. Also, provide the routing and account number, and click the Save option.
At last, when you are done making the necessary changes, opt for the Accept and Submit option.

QuickBooks Desktop Payroll

Primarily, you must access the QuickBooks Desktop Payroll application.
After this, log in using the correct QuickBooks admin username and password.
Thereon, choose the Employees > My Payroll Service and then hit the Activate Direct Deposit option.
Soon after this, head to the Get Started option. In case the Get Started isn’t visible, then do as follows:
- Choose the “I’m the admin, and I’m the primary person who can”. Then, provide the admin’s email address or user ID accurately.
- After this, hit the Continue tab.
- Now, mention the email or User ID and password for your Intuit account and hit the Sign In option. If you don’t have an Intuit account, opt for the Create an Account Link.
  - Important Tip: If you have previously logged into the Intuit account somewhere else in QuickBooks, then this screen isn’t visible.
- At last, complete the Get Started to complete the process.
You must browse to the Business tab to click the Start option and complete the details accurately.
Following this, insert the Principal Officer’s info and hit the Next tab.
Afterwards, choose the Add new bank account option and provide the bank name and online bank details. Otherwise, you can also use the bank routing and account numbers.
Furthermore, you must generate a new PIN. You can access this PIN while sending your payroll every time. Once again, type the PIN for the confirmation and hit the Submit tab.
Proceeding further, choose the Accept and Submit option. If you are asked, then confirm the Principal Officer’s full Social Security number. Later on, opt for the Submit option. Herein, you will be provided with the following messages that state:
- Your bank account is connected: This message basically indicates that you are all set to pay your employees using direct deposit.
- Thank you for signing up for QuickBooks Direct Deposit. You will see this option beside the Activate Direct Deposit option. This message basically states that some additional steps are required to connect with your bank account. For that, move towards the next step.

Third Step: Verifying Your Bank Account

If you fail to connect with your bank account, we will ping the account with a test debit of less than $1.00. For that, all you require is to mention that amount to authorize your account for payroll transactions. You will see that it will take around 2 days before you notice the debit.

Method 4: Update the QuickBooks Application

Working on an older QuickBooks application might be one of the reasons that may trigger the QuickBooks direct deposit not working issue. The following are the steps for updating the QuickBooks application to the updated version.

Latest Updates of the QuickBooks Desktop

Open the QuickBooks application and browse to the Help menu.
After this, head to the Update QuickBooks from the drop-down menu list.
Thereon, pick the Update Now tab from the Update QuickBooks window.
Now, you must mark the checkbox of Reset Updates present beside the Get Updates option. Then, opt for the OK tab for resetting the QuickBooks application.

Method 5: Make Sure You Are Running an Active Payroll Subscription

To verify that you are working on an active QuickBooks Payroll subscription, do the following.

Firstly, launch the QuickBooks application and hit the Employees menu.
After this, head to the My Payroll Service > Account/Billing Information option.

Now, you must try signing in to the Intuit account and ascertain that the subscription status shows Active.
If you notice the status has expired, then renew it right away to continue the uninterrupted services.

Method 6: Resetting the Internet Settings

Sometimes, the incorrect internet settings are one of the possible reasons that trigger Payroll Processing Delay Error from Intuit issue.

To begin with, shut down the QuickBooks Desktop and launch Google Chrome on your desktop.
After this, move to the Tools icon from the top right corner of the screen.
Thereon, choose the Internet Options and tap on the Reset or restore defaults button below the Advanced Settings.
Now, hit the Apply button and then OK. Later on, launch your QuickBooks Desktop.
Now, you must opt for the Employees tab and hit the Get Payroll Updates option. Make sure that you have marked the check box next to the Download Entire Update.

At last, pick the Download Latest Updates option and allow the updates to run unless you see the confirmation message Download Complete on your screen.

Conclusion

QuickBooks payroll direct deposit not working is a serious concern that prevents users from paying employees on time. Also, it disrupts the payroll processing tasks, which may lower the morale of the users to work efficiently. But by performing the above solutions, you can easily resolve this issue smoothly. Furthermore, if you are still struggling while processing payroll, feel free to communicate with our QB professionals to get the best QB payroll support.

Frequently Asked Questions (FAQ’s):-

Question 1: How long does the QuickBooks direct deposit take?

Ans. The QuickBooks direct deposit will take up to 5 days to complete the payroll processing tasks. If you are a QuickBooks Desktop Payroll Assisted, you have a Next-day (1-day) funding time.

Question 2: How do I know if a QuickBooks direct deposit went through?

Ans. Perform the steps below if a QuickBooks direct deposit went through.

Firstly, you must review your employee’s direct deposit status.
Afterwards, head to Employees and choose the View Payroll Run Status.
When you access the Recent payrolls section, opt for a payroll.
Now, pick the View Payroll Run Status drop-down, then Selected payroll. With this, you will notice the status of the paycheck in the Payroll status window.

Question 3: What will happen when QuickBooks’ direct deposit fails?

Ans. If the QuickBooks direct deposit fails, then the employees will receive their funds in the business account that you use to generate the deposit in a few business days.

Question 4: What would happen if I changed my direct deposit 2 days before payday?

Ans. If you change your direct deposit 2 days before payday, then it might be possible that your direct deposit may not be active instantly.

Question 5: How can you update direct deposit in QuickBooks?

Ans. To update direct deposit in QuickBooks, follow the steps below.

Initially, move to the Payroll Info section and hit the Edit tab below the Direct Deposit Account.
After this, insert the new bank account details and choose the Update option.

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About The Author

Jonathan Browns

Jonathan Brown is a trained QuickBooks professional with 10 years of experience in the accounting sector. Moreover, he is passionate about helping businesses reduce the stress of managing accounts. Also, he is proficient in assisting entrepreneurs and small business owners to use QuickBooks and enhance their accounting experience.

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