How to run payroll and switch employees to direct deposit in QuickBooks Online

Here’s how to run payroll and switch employees to direct deposit in QuickBooks Online Payroll. Menu names can vary slightly by payroll plan and recent QuickBooks updates.

Part 1: Switch employees to direct deposit

1. Confirm direct deposit is set up for your company

In QuickBooks Online, go to:

Payroll → Overview or Payroll → Employees

Look for a direct deposit setup prompt. QuickBooks may require you to verify your business bank account before you can pay employees by direct deposit.

You will typically need:

• Company bank account and routing number

• Principal officer information

• Company legal name, EIN, and address

• Payroll tax setup completed

QuickBooks may make two small test deposits to verify your bank account, depending on your setup.

2. Open the employee profile

Go to:

Payroll → Employees

Select the employee you want to switch.

3. Edit the payment method

Inside the employee profile, find the section for:

Payment method, How do you want to pay this employee?, or Payment details

Choose:

Direct deposit

4. Enter the employee’s bank information

You will need the employee’s:

• Bank routing number

• Account number

• Account type: checking or savings

• Deposit amount or percentage, if splitting deposits between accounts

You can usually choose either:

• Deposit entire net pay into one account

• Split pay between multiple accounts

Save the employee profile.

5. Get authorization from the employee

Before paying by direct deposit, you should have the employee complete a direct deposit authorization form and provide voided check or bank verification documentation.

QuickBooks may let the employee enter their own direct deposit details through QuickBooks Workforce, depending on your settings.

Part 2: Run payroll in QuickBooks Online

1. Start payroll

Go to:

Payroll → Employees → Run payroll

Choose the correct pay schedule, such as weekly, biweekly, semimonthly, or monthly.

2. Select the pay period and pay date

Confirm:

• Pay period start date

• Pay period end date

• Pay date

The pay date is especially important for direct deposit because QuickBooks has processing deadlines.

3. Enter employee hours and pay

Enter or review:

• Regular hours

• Overtime

• Salary amounts

• Bonuses or commissions

• Reimbursements

• Sick or vacation hours

• Deductions and contributions

For salaried employees, QuickBooks may already fill in the regular pay.

4. Preview payroll

Click:

Preview payroll

Review each employee’s paycheck carefully.

Check:

• Gross pay

• Employee taxes

• Employer taxes

• Benefits and deductions

• Net pay

• Payment method: direct deposit or paper check

5. Submit payroll

Once everything looks correct, select:

Submit payroll

For direct deposit employees, QuickBooks will debit your payroll bank account and send the net pay to employees on the pay date.

For check employees, you can print checks after submitting payroll.

Important direct deposit timing

QuickBooks direct deposit usually requires payroll to be submitted before a cutoff time and a certain number of banking days before payday. The exact deadline depends on your QuickBooks Payroll plan and your direct deposit funding speed.

As a safe practice, submit payroll at least 2 banking days before payday unless your account clearly shows same-day or next-day direct deposit eligibility.

After payroll is submitted

You can view payroll details under:

Payroll → Employees → Paycheck list
or
Payroll → Overview → Payroll history

From there, you can:

• Print pay stubs

• View paycheck details

• Void or delete checks, if still allowed

• Review payroll tax liabilities

• Confirm direct deposit status

Common issues to watch for

If direct deposit is not available, check whether:

• Your company bank account is verified

• Payroll setup is complete

• Employee bank details are entered correctly

• The employee is marked as active

• You are submitting payroll before the direct deposit deadline

• Your payroll subscription includes direct deposit

If an employee was previously paid by paper check, changing them to direct deposit only affects future payrolls. It does not change already-created paychecks.