Pay an employee with direct deposit

Register for direct deposit and add an employee's bank account. This way, you can pay electronically when you run payroll.

How it works

Direct deposit lets you pay employees electronically. However, it takes a few days to pay an employee with direct deposit, so you'll need to run payroll five business days before your pay date and the funds will be withdrawn from your originating bank account four business days before the pay date.

If you don't meet the five business day lead time, we'll ask you to change your pay date, or change the payment method. This way, we'll ensure you pay employees on time.

Before you start

Make sure you:

Choose to pay with direct deposit

  1. In the Payroll menu, select Employees.
  2. Select the employee's name.
  3. Click the Payment Method tab.
  4. Select Direct deposit as their payment method.
  5. Enter an employee’s bank account details.

    Xero allows direct deposits to standard checking accounts, savings accounts and some money market checking accounts.

    You can add up to four US bank accounts by clicking Add Another Bank Account.

  6. Click Save.

Once you finish setting up direct deposit for your employees, run a pay run to pay them electronically.

Run payroll