Funding Payroll through GoCo's Embedded Payroll

Before processing regular, off-cycle, or bonus payroll, review this guide to understand how payroll is funded and how GoCo's Embedded Payroll partner interacts with your bank.

ℹ️Key Terms: Check Date vs. Debit Date

• Check Date:
  The date employees receive their wages for the specified pay period.
• Pay Period:
  The timeframe when the work was performed.
• Debit Date:
  The date funds are withdrawn from your company's bank account to pay employees by the check date.
  • The debit date aligns with your payroll processing speed and requires sufficient funds to cover net pay and payroll taxes.

⏳Payroll Processing Speeds and Debit Dates

Two-Day Payroll 

• Debit Date: Two business days before the check date.
• Example:
  • Check Date: Friday, May 15
  • Debit Date: Wednesday, May 13

In the event that an urgent Payroll is ran the following will apply: 

Next-Day Payroll

• Debit Date: One business day before the check date.
• Example:
  • Check Date: Friday, May 15
  • Net Pay: $50,000
  • Taxes: $25,000
  • Total Funds Required: $75,000
  • Debit Date: Thursday, May 14

❗Using Sweep Accounts

For businesses using sweep accounts:

• Ensure funds are available on the debit date to avoid suspension of expedited processing speeds.
• GoCo reserves the right to verify bank balances before payroll processing through RFIs 

📄Additional Information for Payroll Processing

Due to recent economic and banking challenges, GoCo may request proof of sufficient funds on the debit date. Notifications will be sent for any additional verification needs.

Bank Transactions

GoCo debits three separate transactions per payroll:

1. Employee pay via direct deposit.
2. Employee reimbursements.
3. Payroll taxes sent to state and federal agencies.

Additional debits may occur for:

• Contractor payments.
• Monthly invoices.
• Historical tax payments.

📖Bank Code Glossary

Here’s a quick reference for bank codes used in transactions processed through GoCo's Embedded Payroll Partner Gusto. 

 

Code	Transaction Type
NET	Debit Net Pay
TAX	Debit Tax
CON	Credit Contractor Pay
REM	Debit Reimbursement
FEE	Debit Payroll Fee
PAY	Credit Employee Pay

🏦Bank Account Verification with Plaid

GoCo's Embedded Payroll Partner Gusto uses Plaid for secure and instant bank verification.

• Advantages:
  1. Immediate bank account setup for payroll.
  2. Real-time alerts for insufficient funds or other issues.
  3. Secure method of verification for customers. 

When you sign up for GoCo Embedded Payroll, our Payroll Specialist will begin your onboarding process. During this process, if you are a new GoCo platform customer you will enter in your bank details that will be used for your GoCo subscription, as well as your payroll and taxes.

For customer not using Plaid, or if you have a bank that is not available using Plaid, GoCo will reach out to verify your bank via different method, typically micro deposits that are manually verified. 

📆Federal Bank Holidays

Payroll does not process on Federal bank holidays. If a holiday falls on your payroll date, process payroll on the prior business day. GoCo will send reminders of upcoming bank holidays. 

⚠️What happens if funding fails? 

Resolving Common Banking Errors for Funding Failures

Below are the three most frequent errors, their implications, and steps to resolve them to unblock payroll:

Error Code RO1: NSF (Non-Sufficient Funds)

Details:
GoCo's Embedded Payroll Partner was unable to debit funds from your company’s bank account due to insufficient funds to cover some portion of your payroll run.

What Happens:

• Employees are still paid, and taxes are remitted on time.
• Funds are advanced by GoCo’s Embedded Payroll Partner after the debit failure occurs.

How to Resolve:

• Payroll is temporarily blocked.
• Additional debit attempts will be made to collect the funds.
  • If successful, payroll is unblocked, and no further action is required.
  • If unsuccessful, GoCo will contact you to discuss alternative solutions for resolving the advanced payroll amounts.

Good to Know:
Most banks charge an NSF fee. Ensure your account has sufficient funds to cover both the payroll cash requirements and any associated bank fees.

Error Code RO2: Account Closed

Details:
The bank account associated with payroll is closed.

What Happens:

• Employees, contractors, and taxes are paid as scheduled.

How to Resolve:

• Update your account information in GoCo.
• Provide the required financial information (RFI).
• A new debit attempt will be made.
  • If successful, payroll is unblocked, and no further action is required.
  • If unsuccessful, GoCo will contact you to discuss alternative solutions for resolving the advanced payroll amounts.

Error Code RO16: Account Frozen

Details:
The bank account is in a frozen state, which may be due to actions by the account owner, the bank, or governing authorities.

What Happens:

• Employees, contractors, and taxes are paid on time despite the issue.

How to Resolve:

• Update your account information in GoCo.
• Provide the required financial information (RFI).
• A new debit attempt will be initiated.
  • If the issue persists, GoCo will reach out to explore alternative funding methods.

 

For any additional questions, please reach out to us at support@goco.io 💚