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How do I pay my team with FreshBooks Payroll?

Once your FreshBooks Payroll powered by Gusto account is set up, you can run employee payroll and contractor payments as needed.

 

If you're looking to manage your FreshBooks Payroll settings, review How do I manage my FreshBooks Payroll account?. To manage your team members on FreshBooks Payroll, review How do I manage team members on FreshBooks Payroll?.

 

 

Run Payroll

Run a regular payroll based on your business’ pay schedule. The deadline to submit payroll runs prior to payout is either 4 business days for 4-day ACH or 2 business days for 2-day ACH by 6:30 pm ET on business days.

Bank debits for submitted payroll runs will not occur until the day of the payroll deadline. Direct deposits will be deposited on the payment date displayed in the Review and Submit section when running payroll. 

 

If you've selected Check as the payment method for any employee, you will need to manually issue, and if needed, print and mail the check for the employee outside of FreshBooks.

 

Use the below steps to run a payroll:

  1. Select the Payroll section
  2. Next, select the Pay… button and then select EmployeesPayroll section with run button selected on employees.
  3. In the Pay Period section, choose an available period in the dropdown
    Pay period section with dropdown to choose a pay period.
  4. Then select Continue
  5. In the Hours and Earnings section, review your employees’ information
    Hours and earnings section with list of employees and their earnings.
  6. If needed, select an employee to edit their Hours, Additional Earnings, Reimbursements, and Payment Method, then select Confirm
  7. Next, select Save and Continue
  8. In the Review and Submit section, your payroll information will begin preparing

    1. If you're not yet eligible for 2-day ACH, or the payroll amount exceeds the maximum limit, choose one of the following: 

      Payroll amount exceeded pop-up with three options to select instead.

      1. Move debit date earlier - If there is enough time, the debit date will be moved earlier to use 4-day ACH processing instead

      2. Move pay date later - If there is not enough time, the pay date will be moved later to use 4-day ACH processing instead

      3. Send wire transfer to Gusto - Wire funds directly through your bank to pay on time

      4. Pay by check - Your taxes will be debited and you will be responsible for manually issuing and if needed, printing and mailing check payments for your employees outside of FreshBooks

    2. Select Save and Continue
      1. If you’ve selected Send wire transfer to Gusto, review Important information about wire transfers and select OK to proceed
        Pop up with details on wire transfers.
  9. Then review the Business Pays and Debits, as well as Employee Take Home sections as needed
    Review and submit section with details of payroll run displayed.
  10. Select Submit Payroll. Your payroll run will be listed in your Payment History as Submitted. Your payroll run will start processing at 6:30 pm ET on the date of your specified payroll deadline. 

On payday, your payroll run will be posted to your General Ledger report. Wages, employer taxes, and reimbursements will be recorded to their own accounts, and reflected in your Profit and Loss report and your Chart of Accounts. 

When the payroll run is successfully marked as Processed, your employees will receive their direct deposit payments and their pay stubs by email. To cancel a payroll run while it’s still in the Submitted status or download pay stubs as PDFs, go to Review Payroll Runs and Contractor Payments below.

If your FreshBooks Payroll is on 2-day ACH and you’ve selected Send wire transfer to Gusto, review the wire transfer details below for next steps.

 

Run Contractor Payments

The deadline to submit payments for your contractors is 4 business days prior to payout, by 6:30 pm ET on business days. To pay your contractors, use the below steps:

 

Use How do I manage team members on FreshBooks Payroll? to add new contractors to FreshBooks Payroll before running contractor payments.

 

If you've selected Check as the payment method for any contractor, you will need to manually issue, and if needed, print and mail the check for the contractor outside of FreshBooks.

 

  1. Select the Payroll section
  2. Next, select the Pay… button and then select Contractors
    Pay button with contractors selected.
  3. In the Pay Date section, choose the Pay Date
    Pay date with date option.
  4. Then select Continue
  5. In the Hours and Payment section, select a contractor
    Hours and payments with a contractor available to select.
  6. Contractors’ pay total are automatically set to $0, edit the Hours field, and if needed, the Bonus and Reimbursement fields
    Fields to edit for contractor's pay.
    1. Next, for Payment Method, select Check or Direct Deposit
    2. Any contractors that are left with a $0 payment will automatically be removed from the Review and Submit section later and not receive any payments
    3. Then select Confirm
  7. Next, select Continue
  8. In the Review and Submit section, your payment information will begin preparing

    1. If you're not yet eligible for 2-day ACH, or the payment amount exceeds the maximum limit, choose one of the following: 
      Payment amount exceeded pop-up with three options to select instead

      1. Move debit date earlier - If there is enough time, the debit date will be moved earlier to use 4-day ACH processing instead

      2. Move pay date later - If there is not enough time, the pay date will be moved later to use 4-day ACH processing instead

      3. Send wire transfer to Gusto - Wire funds directly through your bank to pay on time

      4. Pay by check - Your taxes will be debited and you will be responsible for manually issuing and if needed, printing and mailing check payments for your contractors outside of FreshBooks

    2. Select Save and Continue
      1. If you’ve selected Send wire transfer to Gusto, review Important information about wire transfers and select OK to proceed
        Pop up with details on wire transfers.
  9. Then review the Total Amount details and the Business Pays section as needed
    Review and submit with a summary of contractor's pay information.
  10. Select Submit Payment to start processing your payments, and your contractor payment will appear in the Payment History list.

Your contractor payment will be submitted today, and updated to Processed status once received by Gusto. If you need to cancel a contractor payment while it’s still in the Submitted status, or download contractor payment receipts, go to Review Payroll Runs and Contractor Payments below.

If your FreshBooks Payroll is on 2-day ACH and you’ve selected Send wire transfer to Gusto, review the wire transfer details below for next steps.

 

Share Contractor Payment Receipts

Payment receipts will be generated on the pay date selected. To share the payment receipt with your contractors, use the below steps to download a PDF for each contractor:

  1. Select the Payroll section
  2. Under Payment History, select the contractor payment
    Payroll section with contractor payment highlighted.
  3. Under Business Pays on the Pay Date, select a contractor
    Contractor pay date information with contractor highlighted.
  4. The contractor’s payment receipt will be displayed, use your browser’s print dialog to download it as a PDF
  5. Repeat steps 3-4 for each contractor as needed, then share the PDF with your contractors using any communication method you prefer.

 

Payment Methods

Review details on 2-day ACH payment requirements, check payments, and sending wire transfers to Gusto: 

2-Day ACH Payment Requirements

2-day speed allows you to process direct debit payroll runs up to 2 business days in advance of the check date instead of 4 business days with 4-day ACH. You’ll automatically be switched to 2-day speed after all the below eligibility is met:

  • You’ve run at least 3 successful payrolls
  • It's been 45 days since you were approved for FreshBooks Payroll

Until then, you can process payroll on 4-day direct deposit speed, or pay your team faster by using wire transfer or check payments.

When using 2-day ACH, review the following:

  • 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 may be turned off
  • Insufficient funds - If funds are not available when processing 2-day ACH payroll, the following will occur:
    1. Your direct deposit speed will be switched to 4-day ACH moving forward
    2. You will need to reach out to our Support team to have your failed payroll run re-submitted using 4-day ACH or Check as the payment method
    3. Access to 2-day ACH payroll processing will be suspended for a period of time, refer to your email for more details. Multiple instances of insufficient funds could result in the permanent suspension of your FreshBooks Payroll account.

 

Check Payments

If you’re importing expenses via via Bank Connections or Bank Reconciliation and you’ve paid employees using check payments, the automatically created expense for the check payment can be addressed in one of two ways:

 

Send Wire Transfers to Gusto

If you’ve exceeded the maximum direct deposit limit for 2-day ACH, you can wire transfer funds to Gusto to pay your team on time instead. Keep in mind that bank fees may apply for wire transfers.

Once you submit a payroll, wire instructions are provided for you to use with your bank. If your wire doesn’t meet the requirements below, Gusto may not be able to receive it and your team will not be paid on time.

 

Wire Transfer Requirements

The wire transfer must meet these requirements for Gusto to receive it:

  • The total amount you send must match the amount in the wire instructions
  • The originating bank account must be based in the US
  • You must be authorized to use the bank account

 

After payroll is submitted in step 10 above, a pop up will display Wire funds for [pay date] payroll:
Pop-up with details on when to wire funds by with two buttons for next steps.

 

Let Gusto know when you’ve wired funds for your payroll with the below steps:

  1. In the pop-up, select Continue to begin
    1. If Do It Later is selected, you can return to the wire transfer details by selecting the payroll run in the Payment History
    2. Then in the Pay Period overview, in the wire funds banner, select the Submit Details button
      Banner on pay period page with submit details button to send wire transfer details.
  2. In the Send the wire transfer section, review the wire transfer details and note the deadline to wire transfers by
  3. If needed, select Download wire instructions to save a copy as a PDF file
  4. Wire the funds to Gusto from your bank
  5. Once you’ve completed the wire transfer with your bank outside of FreshBooks, check the box off next to I have sent a wire transfer for [amount] following the requirements listed on this page
  6. Next, enter the Date Sent, Amount, and Name of Bank
    Fields to fill out for wire transfer details.
  7. If needed, add details in Additional Notes to help Gusto match the transfer
  8. Then select Submit Details
  9. The wire transfer details will be submitted. You’ll receive an additional email once the wired funds have been received by Gusto for your payroll.

 

Review Payroll Runs and Contractor Payments

If needed, under Payment History, select the payroll run or contractor payment to review the Pay Period information: 
Payroll section with payment history listing 4 payments.

Review Payroll Runs

While viewing a payroll run pay period, you can select either:

Pay period of the payroll with a summary of all payroll information displayed.

  • Cancel - If you need to cancel the payroll or payment while it’s in the Submitted status
  • Payroll Receipt - View a summary of the payroll run and download each team member’s pay stub as a PDF to share with your team member
  • Employee Pay Stubs - View and download PDFs of pay stubs by selecting the team member's name in the Business Pays & Debits section

 

Review Contractor Payments

While viewing a contractor payment pay period, you can select either:

Pay period of the contractor payment with a summary of all contractor information displayed.

  • Cancel - Check the box off next to a contractor, select Bulk Actions, then select Cancel Payment if you need to cancel the payment while it’s in the Submitted status
    Cancel payment button while contractor's payment is selected.
  • Payment Receipt - Under Business Pays, select any contractor to view and download the payment receipt as a PDF

 

FAQs

I missed my first payroll run, how do I update the pay schedule?

If you haven’t run your first payroll prior to the first pay date selected during your payroll onboarding, your pay schedule will need to be updated. Use the below steps to access your pay schedule and select a new first pay date:

  1. Go to the Payroll section
  2. In the Missed first payroll banner, select the Set up Pay Schedule button
    Banner with set up pay schedule button in Payroll section.
  3. Complete step 4 in the Set Up Your Payroll Schedule section, choosing a new First Pay Date that is at least 5 business days for 4-day ACH direct deposit or 2 business days for check payments
  4. Then select the Complete button. Once a new payroll schedule has been saved, your account will be re-reviewed again for approval - this takes up to 2 business days. You’ll receive an email once approved, then you can begin running payroll.
    Banner in Payroll section confirming payroll is being set up in 1-2 business days.

 

 

When can I cancel a payroll run or contractor payment?

The option to cancel a payroll run or a payment is only available while the payroll or payment is in Submitted status. While in the Submitted status, payroll runs or payments must be canceled before the deadline of 6:30 pm ET on business days.

 

 

Why didn’t my payroll run?

If you received an error trying to submit your payroll where Payroll information is required, this can be due to any of the below:

  • Information is missing, incorrect, or a new signature is required
  • Bank information is incorrect
  • Employee with new state requires new documents to be signed

To adjust your information, review How do I manage my FreshBooks Payroll account?.

 

Can I use a different payment method for a payroll run? 

For direct deposit, this can only be used if your employee's bank account information is entered in their team member profile.

For check, if you’ve selected direct debit as the default payment method for your employees, an individual payroll run can be updated to use check as the payment method as needed. This is useful if you need to run a late payroll that’s past the payroll deadline, in time for payday. Use the below steps:

  1. Start the process of running payroll
  2. In the Hours and Earnings section, select a team member
    Hours and earnings section with team member listed to select.
  3. Under Payment Method, select Check from the dropdown
    Payment method dropdown with check selected.
  4. Then select Confirm
  5. Repeat steps 2-3 as needed for each team member
  6. Then finish submitting your payroll run.

 

 

How can I run an off-cycle payroll run?

If you need to run an off-cycle payroll outside of your regular pay schedule, please reach out to our Support team to run an off-cycle payroll for you. Include specific information like employee names, work periods, payment dates, any deductions and contributions, and payment details in your request. 

All off-cycle payroll runs, including wage corrections and reconciliation payrolls can only be viewed in the Payroll Journal Report.

 

 

How do I resolve the outstanding balance in my FreshBooks Payroll?

If you have an outstanding balance owed due to insufficient funds, you’ll receive an email and notification inside your FreshBooks account. Unblock your account by submitting payment with these steps:

  1. In FreshBooks, select the Payroll section
  2. Then in the notification for Payment required to clear outstanding balance, select the Submit Payment button
  3. In the new window for All Recovery Cases, select the Resolve link next to the event
  4. Review the reason for the error and take action to correct it
  5. Then when you’re ready to try again, select the Resubmit Payment button
  6. Your recovery case will update to reflect Redebit Initiated. It’ll take up to 4 business days to process the outstanding payment. You’ll receive an email confirmation when the balance is clear and you’re able to run payroll again.

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