Connecting Gusto to Mercury Books turns your completed payroll runs into balanced journal entries automatically, with wages, taxes, and reimbursements posted to the right accounts. This article explains how to set it up and how payroll behaves in your books.
Connecting Gusto
- Go to Accounts in Books
- Click Link account > Payroll or payment processor and choose Gusto
- Authorize Mercury to read your Gusto payroll data
- Set the date you want Books to start pulling payroll from
Books then backfills your completed payroll runs from that date forward.
Note: Connecting payroll requires team management permission, which admins usually have. If the option is greyed out, hover over it to see what's missing and ask an admin on your team.
What comes in
Books pulls completed payroll runs — runs that have been processed and paid. For each one it creates a balanced journal entry covering wages, employer taxes, employee tax withholding, and reimbursements, mapped to the matching accounts in your chart of accounts.
Payroll works on both cash and accrual books.
Where to find your payroll
Go to Payroll in the left-hand menu of Books. Each row is a payroll run, with its period start and end dates.
Click a run to open it. The side panel gives you three views:
- Details — what the payroll is made up of, line by line
- Payment matching — what a bank transaction can settle against
- Journal entries — what actually posted to your books
Matching payroll to your bank transactions
Gusto usually debits your bank account more than once for a single payroll run — typically one debit for net pay, another for payroll taxes, and sometimes another for reimbursements or benefits. You match those debits to the payroll lines they settle.
- Within Books, go to to Payroll and open the run, or open the bank transaction from Transactions
- Choose to match the payment
- Select the payroll lines that debit covers
- Click Complete
Which lines you can match depends on your accounting method:
- On cash books, you match the expense lines — earnings, employer taxes, and employer benefit contributions.
- On accrual books, wage and reimbursement expense was already recognized when the payroll synced, so you match against the payable lines instead — wages payable and payroll tax payable.
Regardless of your accounting method, you are only required to match the lines that are included in Payroll Cash Requirement.
- Wages
- Employer Taxes
- Employee Taxes
- Reimbursements
Benefits and some jurisdictional taxes can have varying payment schedules, such as quarterly or bi-annually, that don’t match with a bi-weekly or monthly payroll model. As long as you match payments made to the cash requirement lines, the payroll run will be marked as Fully Matched.
Troubleshooting
Payroll is stuck finishing setup. Certain payroll runs — corrections, reversals, and true-ups with negative amounts — can hold up the initial backfill. Contact support with your Gusto connection and we'll clear it.
A payroll run won't fully match. Check whether a benefits amount is missing from the journal entry. You can also record an adjustment while matching, then clear it with a manual journal entry.
A payroll debit is in my bank feed but not matched. Payroll debits aren't matched automatically. Open the transaction and match it to the payroll lines it covers.
FAQs
Does Books pull payroll runs that haven't been paid yet?
No. Only completed runs come in.
Does Gusto get anything back from Books?
No. The connection is read-only.
Are other payroll providers supported?
Gusto is the only payroll integration today. For other providers, record payroll with manual journal entries.
Mercury is a fintech company, not an FDIC-insured bank. Banking services provided through Choice Financial Group and Column N.A., Members FDIC.