This article explains how payroll processing works in Gusto — including key terms, debit timing, bank requirements, wire transfers, and bank transaction codes. It applies to regular, off-cycle, and extra pay payrolls.
Check date — the date your team members get paid. This is the date the paycheck is issued for that pay period.
Pay period — the timeframe your team members worked and get paid for. For regular payrolls, pay periods are tied to your company's pay schedule.
Debit date — the date Gusto withdraws funds from your company bank account to cover net payroll and taxes. Your check date and direct deposit processing speed determine this date.
Payroll submission deadline — to process payroll on your intended check date, submit by 4 pm PT on your run-by date. If you submit after 4 pm PT, we'll process your payroll the next business day.
Your payroll calendar shows the payroll deadline and payday together for each upcoming pay period. Use it to see exactly when to submit payroll for the check date you want, instead of calculating the payroll deadline yourself.
Important: Running payroll early does not move up your debit date or payday. Gusto debits your account and pays your team according to the timeline set by your pay schedule and processing speed. To pay your team outside that schedule, run an off-cycle payroll instead.
To view your payroll calendar, follow these steps.
Sign in to Gusto and go to Pay.
Click Payroll calendar.
Find the pay period you want. Each pay period card shows the payroll deadline and the payday for that period.
Click List view to see the same dates in a list instead of a calendar.
Note: Submit payroll by 4 pm PT on the payroll deadline shown in your calendar. If you submit after that time, we'll process payroll the next business day.
For the full steps to run and submit payroll, go to Run a regular payroll (for admins).
We calculate your debit date based on your direct deposit processing speed. We offer three processing speeds.
Processing speed
Debit date
Example (check date Fri, May 15)
Next-day
One business day before check date
Thu, May 14
Two-day
Two business days before check date
Wed, May 13
Four-day
Four business days before check date
Mon, May 11
Funds to cover net payroll and taxes must be available in your bank account from the debit date until we successfully debit the amounts. Failed debits may result in additional fees on your next invoice.
When you backdate a payroll, you can set the check date to a past date within the same calendar year quarter. For backdated payrolls, the debit date is the day you submit the payroll — not the backdated check date. You can pay backdated payrolls only by check.
For example, today is Jun 23 and you backdate a payroll to Apr 15. The debit date is Jun 24 — the day after you submit. Funds to cover the associated payroll taxes must be available from that date until we successfully debit the amount.
Important: When you backdate a payroll, taxes may be paid late. The applicable tax agency may assess penalties and interest as a result. You are responsible for any penalties and interest that accrue.
Payrolls and direct deposits do not process on federal bank holidays. If a bank holiday falls on your typical run date, pay date, or any day in between, you need to submit payroll on the prior business day. We'll send you a reminder before an upcoming bank holiday.
You need to keep enough funds in your bank account to cover both net payroll and taxes in full by 4 pm PT on the debit date. If funds are not available by that time, here's what happens.
We'll charge a $100 processing fee.
We'll block payroll processing until the automatic re-debit clears.
We may temporarily suspend access to next-day and two-day payroll speeds.
Pro tip: Use Instant Bank Verification to help prevent funding errors and fees.
If your company uses a sweep account, make sure funds are available before the debit date — not after. If funds are swept after the debit date, we'll block payroll processing until the re-debit clears, and we may suspend access to next-day and two-day processing speeds. We reserve the right to require proof of sufficient bank balances or delay payroll if needed.
Millions of people trust Plaid to connect their bank accounts to apps like Gusto. Connecting your bank account through Plaid gives us real-time access to your account balance. This helps us alert you to issues — like insufficient funds — before they affect payroll.
Verifying with Plaid offers a few advantages.
Your bank connects instantly. Manual verification takes a few business days and requires extra steps.
We can alert you to funding issues in time to fix them before they affect your team.
To connect to Plaid, follow these steps.
Sign in to Gusto and click your company name in the left menu.
Under Settings, click Plan and billing.
Under Bank accounts, click Connect to Plaid next to the account you want to verify.
Work through each Plaid prompt and select your account.
If the connection is successful, the bank account status will show Connected.
Note: In some cases, we may ask you to enter your account and routing number to confirm the details Plaid sends us — some banks require this as an added security step. To disconnect, sign in to your bank's website and remove Gusto as a third-party connection.
Given recent banking challenges, we may ask you to provide proof of sufficient bank balances before processing payroll. If we need this, we'll notify you before the 4 pm PT cutoff on your debit date.
We may require a wire transfer if a single payroll — or a group of payments within the same deposit period — has a federal tax liability of $100,000 or more. This is because the IRS $100,000 Next-Day Deposit Rule requires tax deposits within one business day. Since we deposit taxes on your behalf, we may collect funds by wire or reverse wire before remitting taxes.
If we require a wire, we'll notify you when you submit payroll and provide instructions in your Gusto account.
Important: We'll never send wire instructions by email or phone. Always view wire instructions directly in your Gusto account on your Home page. If you get wire instructions by email or phone, contact [email protected] before sending any funds.
Do the following to make sure you're ready if we request a wire.
Confirm wire authorization — make sure you have permission to wire funds. If you do not, contact your primary account holder or bank account owner to get authorization on file with your bank.
Check daily wire limits — some banks have daily wire limits. Confirm your limit covers your next payroll, and ask your bank to increase it if needed.
Check the wire deadline — view your wire instructions on your Gusto Home page and make sure you meet the deadline.
Fees — your bank typically charges $10 – $30 to send a wire. Our bank charges $5 to accept it. This $5 fee appears on your monthly invoice.
Reverse wire authorizes us to withdraw funds from your account by wire transfer, so you do not have to initiate the wire yourself each time. Once set up, run payroll as normal — we'll notify you before submitting if we plan to use a reverse wire.
Important: Set up reverse wire before you process payroll — it can take time to complete. Contact your bank to confirm the timeline.
For businesses with more than one employee, you can easily manage the Run payroll flow using the tools below.
Use the search bar above the Employees column to find the employee you want to review.
Use the caret next to the Employees column to reveal a drop-down for sorting options. Sort employees by first or last name.
Use the filter button at the top-right of the payroll page to filter by any of the following.
Department (if enabled)
Whether a team member is skipped or not skipped on the payroll
If you select one or more employees in the far-left column, the filter option will not appear until you deselect those checkboxes.
The bulk edit tool lets you apply changes to all or some of your employees. To bulk edit, follow these steps.
Click Pay and select Run payroll.
Select the checkboxes next to the employees you want to change.
To select all employees on the payroll, select the checkbox next to the Employees column heading.
Click Bulk edit.
Select the action you want from the drop-down.
For example, to skip payroll for multiple employees, choose Skip payroll. To add the same note to multiple employees, choose Personal note.
Fill in any required fields.
Click Update.
Repeat as needed for any other bulk edits.
Finish and submit your payroll.
From payroll, follow these steps to bulk edit changes for all or some of your team members.
Click the three dots and choose Select team members.
Select the checkboxes next to the team members you want to change.
To select everyone, select the checkbox next to Select all at the top of the employee list.
Click Actions and select the action you want.
For example, to skip multiple team members on payroll, select Skip on payroll. To add the same note to multiple team members' paystubs, select Personal note.
Fill in the required fields.
Click Update.
Repeat as needed for any other bulk edits.
After you submit each payroll, we initiate three separate debit transactions from your company bank account, covering each of the following.
One for employee pay (direct deposit only)
One for employee reimbursements
One for all payroll taxes
These transactions happen at the same time, ahead of your payday. Employee pay and reimbursements go directly to team members' bank accounts. Tax amounts go to the applicable state and federal agencies.
You may also see debits for other reasons, including the following.
To review transactions, run a Bank transactions report to view debits and credits, or an Agency payments report to see taxes we paid on your behalf.
Use this table to identify transactions from Gusto on your bank statement.
Code
Transaction type
EBV
Electronic bank verification — credit test transaction
NET
Debit net pay
TAX
Debit tax
CON
Credit contractor pay
ICD
International contractor pay
HPT
Debit historical payroll taxes
BBV
Bank verification debit
BVC
Bank verification credit
FRP
Credit flex repayment (Modern Bank)
FPP
Credit flex pay principal (Modern Bank)
FPF
Credit flex pay fee (Modern Bank)
TLR
Credit tax liability refund
CSC
Credit child support garnishment
REM
Debit reimbursement
TCD
Debit tax correction
FEE
Debit payroll fee
CND
Debit contractor pay
RFD
Debit refund
PDR
Debit employee wages
DDR
Debit donation
CSD
Debit child support garnishment
DOV
Debit overpayment
FPD
Flex pay debit (Modern Bank)
PAY
Credit employee pay
INV
Credit payroll fee — invoice refund
SAV
Credit employee savings
CRF
Credit contractor payment refund
DCR
Credit donation
PAR
Credit wages refund
TRC
Credit tax refund
TAX DEP
Tax department payment
IEE
Credit internal error expense (concessions)
TXP
Credit tax
TPI
Credit tax penalty
WPF
Wire payment fee
ITC
Credit internal transfer — contractor pay
ITE
Credit internal transfer — employee pay
ITT
Credit internal transfer — tax payment
ITF
Credit internal transfer — fees and penalties
ITV
Credit internal transfer — verification
ITI
Credit internal transfer — invoices
ITO
Credit internal transfer — other
ITP
Credit internal transfer — overpayment
ITG
Credit internal transfer — child support garnishment
COV
Credit overpayment
PRS
Credit partner revenue share