Direct deposit payment speeds

There are three timelines used to process payments by direct deposit—employers will be put on 2-day payments* when they begin running payroll with Gusto, and some employers will qualify for next-day payments.

*Heads up: New employers gain access to 2-day payments after an initial 15-day waiting period, and one successful payroll debit (on a 4-day schedule).

Bank reminders

Payments run on a weekend or bank holiday will not begin processing until the next business day.
Paydays cannot fall on a weekend or bank holiday, because they do not move money on these days.
There must be enough funds in your bank account to cover both the net payroll amount and all associated taxes in full—if the funds are not available by 4pm PT on the debit date listed in Gusto:
- You'll be charged a $100 processing fee for the error, and;
- The ability to process payroll will be blocked until our automatic re-debit clears, and;
- Your access to next day and 2-day payroll processing speeds will be suspended for a period of time.
  - To prevent errors and fees, we recommend using Instant Bank Verification.

Check date reminder

Regular payrolls will always default to pay out on the regular check date—even if your company uses faster payments (2-day or next-day) and the payroll is processed early, regular payrolls will not pay out early.

Example: Your company pay schedule is set up to have check dates of the 1st and 15th of the month. If you process payroll on the 10th and use 2-day processing, payroll will still payout on the 15th, per the company pay schedule.

Employees can head to this article to view pay stubs, or learn how to troubleshoot payment issues.

Use the dropdowns below to learn more, or use CMD + F (or CTRL + F) to search for keywords throughout the article.

Next-day payments

Next-day payments are available to customers on the Plus and Premium plan. If you don’t have access to next-day payments, admins can upgrade the plan. With next-day payments, you can run payroll or contractor payments up to one business day in advance of the check date.

Important reminder about payment timeline—notify your employees

For next-day payments, funds are deposited in your team's bank account by the end of the next business day. Most people—depending on their bank—will see the funds arrive the next afternoon, but payments may arrive as late as the end of the business day.

Next-day payment requirements

Keep enough money in your account.
- Check your bank account before making payments. If we’re unable to debit funds, your payments will be blocked and next-day will be turned off.
Any payment exceeding your direct deposit limit will be processed in four business days.
- Next-day payments will not apply if the total amount exceeds your assigned direct deposit limit.
The deadline to run payments in Gusto is 4pm PT, one business day before payday. If you missed the deadline, run late payments or pay your employees by check for one payroll.

Next-day payment timeline example

Thursday: Run payroll or contractor payments by 4pm PT.
Thursday: You will see funds debited from your company's bank account. Funds are processing.
Friday: Funds are deposited in your team's bank account(s) by the end of the business day.

2-day payments

With 2-day payments, you can process payments up to two business days in advance of the check date. Funds are usually deposited in your team's bank account(s) earlier in the morning.

2-day payment requirements

Keep enough money in your account.
- Check your bank account before making payments. If we’re unable to debit funds, your payments will be blocked and 2-day payroll will be turned off.
Any payment exceeding your direct deposit limit will be processed in four business days.
- 2-day payments will not apply if the total amount exceeds your assigned direct deposit limit.
The deadline to run payments in Gusto is 4pm PT two business days before payday. If you missed the deadline, run late payments or pay your employees by check for one payroll.

2-day payment timeline example

Wednesday: Run payroll or contractor payments by 4pm PT.
Wednesday: You will see funds debited from your company's bank account. Funds are processing.
Friday: Funds are deposited in your team's bank account(s), usually in the morning.

4-day payments

With 4-day payments, you have to process payments four business days in advance of the check date. It's important to remember you must have enough funds available in your bank account at the time the payroll is processed.

Monday: Run payroll or contractor payments by 4pm PT.
- Important: Make sure you have enough funds available in your company bank account—depending on the bank, you may see the funds debited the same day, or on occasion, the next day.
Tuesday –Thursday: Funds are processing.
Friday: Funds are deposited in your team's bank account(s), usually in the morning.

If you missed the deadline, run late payments or pay your employees by check for one payroll.

Switch your direct deposit speed

Go to the Payroll section and select Payroll settings.
Under the header "General" and next to "Direct deposit speed", click edit.
- To change direct deposit speeds, you need the applicable admin permissions—reach out to your primary administrator to make the update if you're unable to view or edit the direct deposit speed.
Select the direct deposit speed you’d like from your available options.
- Next-day payments are available to customers on the Plus and Premium plan. If you don’t have access to next-day payments, admins can upgrade the plan.
Click Save.