Troubleshooting direct deposit for payroll

Learn why your direct deposit account's status is on hold, or why a direct deposit payment to an employee was rejected.

Why is the direct deposit account's status on hold?

The direct deposit account status has a status of on hold because:

  • You changed your direct deposit bank account, but the process is not yet complete.
  • The bank account in Payroll Settings does not match the bank account for direct deposit. Either:
  • You changed your company's legal name or tax ID in Xero. Xero will email you about registering for direct deposit again.
  • Multiple direct deposit bank account debits failed.

Need more help?

Click the Contact Xero Support button at the bottom of any Help page. Include your Xero organization name with your request. You'll need to log into Xero if you want to attach a file.

Why was a direct deposit to an employee's account rejected?

A payment to an employee is rejected because Xero cannot withdraw the money from the organization's direct deposit account, or the employee's bank returned the payment.

Xero cannot withdraw money from your direct deposit bank account

If Xero cancels a payment because it cannot withdraw all the money from the direct deposit account, contact your bank.

The employee’s bank returns the payment

If the employee’s bank returns the payment, the employee must contact the bank to determine the issue.

You may need to: