Gusto Payroll on Hold: What It Means, Why It Happens, and How to Fix It
This article explains why Gusto payroll goes on hold, how long it lasts, and what steps you should take to resume payroll quickly.
PAYROLL PLATFORMS
Alex Morgan
1/17/20262 min read
What Does Gusto Payroll on Hold Mean?
When payroll is marked as “on hold,” Gusto has temporarily stopped processing payments. Funds are not sent to employees or tax agencies until the hold is cleared. A payroll hold does not automatically mean payroll has failed. It simply means Gusto needs additional verification or action before continuing.
Common Reasons Gusto Payroll Is on Hold
Account Verification or Review
Gusto may place payroll on hold to verify business information, tax details, or identity documents, especially for new accounts.
Insufficient Funds
If the employer’s bank account does not have enough balance to cover payroll, Gusto will pause processing until funds are available.
Bank Connection Issues
Problems with the linked business bank account, such as authorization failures or disconnected accounts, can trigger a hold.
Compliance or Tax Issues
Missing tax forms, incorrect filings, or state registration issues may cause payroll to be temporarily stopped.
Suspicious or Unusual Activity
Large payroll changes, new bank details, or irregular payment patterns can trigger a security review.
How Long Does a Gusto Payroll Hold Last?
Most payroll holds are resolved within 1 to 3 business days once the required information is submitted. More complex compliance or banking issues may take slightly longer, depending on response time.
How to Fix Gusto Payroll on Hold Quickly
Check Your Gusto Dashboard
Log in and review any alerts or notifications explaining why payroll is on hold.
Complete Verification Requests
Upload any requested documents, confirm bank details, or update missing business information.
Ensure Sufficient Funds
Confirm your business bank account has enough balance to cover payroll and taxes.
Contact Gusto Support
If the reason for the hold is unclear, Gusto support can explain what is required to release payroll.
What Happens to Employee Paychecks During a Hold?
While payroll is on hold, employee paychecks are delayed and not deposited. Once the hold is lifted, payroll usually resumes automatically, and payments are sent according to the updated processing timeline.
How Employers Can Prevent Future Payroll Holds
Keep business and tax information up to date
Submit payroll early
Avoid frequent last-minute payroll changes
Maintain consistent funding levels
Monitor dashboard alerts regularly
A Gusto payroll on hold notice is usually a temporary safeguard, not a permanent problem. Most holds are resolved quickly once verification or funding issues are addressed. Acting fast and responding to Gusto’s requests is the best way to ensure employees get paid without further delay.
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