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.