Before payroll can be processed, you must have enough funds in your account to cover the total amount being debited
This includes:
- Team member wages
- Team member taxes
- Employer taxes
- Any deductions or benefits
- These are typically subtracted from your payroll and left behind in your company bank account for the benefits provider to debit
Think of it as the full cost of payroll, not just what team members take home.
When funds are needed
Funds must be available before payroll is submitted and processed.
If funds are not available:
- Payroll may not process on time
- Tax payments may be missed or delayed
Risks of late funding
Failing to fund payroll on time can lead to:
- Payroll delays (team members not paid on time)
- Late or missed tax payments
- Potential tax penalties from agencies
- Additional processing complications
Best practices
To avoid issues, we recommend:
Keep a buffer
- Maintain 1–2 months of payroll expenses in your account
- Not financial advice, but strongly recommended
Know your payroll totals
- Review your the total amount being debited before each run from your Pay Runs page, not just net pay
Fund early
- Ensure funds are available at least 1–2 days before payroll submission
Monitor cash flow
Plan ahead for:
- Bonus runs
- Commission payouts
- Seasonal payroll increases
Quick checklist before payroll
Before submitting payroll, confirm the following:
- Do we have enough funds for the amount being debited?
- Are there any extra payments this cycle (bonuses, etc.)?
- Has anything changed that would increase payroll costs?
- Are there any other large purchases being made around the time payroll processes that could decrease balances before payroll processing?
Mercury Payroll helps businesses manage payroll and related administrative tasks. Mercury does not provide legal, tax, accounting, or investment advice and does not act as your employer, professional employer organization (PEO), employer of record (EOR), or plan fiduciary. You remain responsible for your legal and regulatory obligations, including worker classification, wage-and-hour requirements, tax withholding and reporting, and benefits eligibility.
Mercury is a fintech company, not an FDIC-insured bank. Banking services provided through Choice Financial Group and Column N.A., Members FDIC.