Handle Failed Funding in Zenoti Integrated Payroll
This article explains what happens when payroll funding fails in ZIP, how Zenoti responds, and the steps you can take to resolve it. When a business funds payroll through Zenoti Integrated Payroll (ZIP), Zenoti initiates a debit from the business’s bank account. Sometimes, this debit may fail—usually due to account-related issues.
Overview
A failed debit can disrupt operations - delaying employee pay, pause tax filings, and putting the business out of compliance. This guide helps you:
Identify common reasons for funding failures
Understand how Zenoti handles failed debits
Follow clear steps to resolve the issue
Prepare for upcoming self-service capabilities
Find answers to frequently asked questions
Acting quickly minimizes business disruption and ensures smooth payroll processing.
Why funding payments may fail
Your payroll debit may fail due to various reasons like insufficient funds in your bank account, incorrect or outdated bank account details, ACH authorization issues or a closed or restricted bank account.
These issues can delay employee pay and halt your tax filings, potentially triggering penalties.
What happens when funding fails
When a funding debit fails:
Zenoti notifies the business by email
For next-day payrolls, employee payments may still succeed
Tax payments are paused
A $100 NSF (Non-sufficient Funds) fee applies
Unless the failed debit is resolved, there will be a block on the account that prevents you to process future payrolls. You can see the below alerts on Zenoti Integrated Payroll dashboard
If retry is not initiated:
⚠️ Payroll debit failed — retry via ACH or same-day Wire to unblock future payrolls.
If retry is initiated:
⚠️ Payment retry in progress — future payrolls remain blocked until the debit is fully settled
Repeated or unresolved may result in service downgrade or termination under Zenoti’s credit policy
How to resolve a failed funding
You can resolve failed payroll funding attempts directly in Zenoti. When your debit fails, a banner appears on your ZIP dashboard informing you of the issue and the available retry options.
How to navigate to the retry options
Go to ZIP Dashboard.
Select Company Transactions.
Open the failed transaction.
Select Actions → Retry Payment.
From here, you can choose between two retry methods: Wire Transfer or ACH.
Option 1: Wire transfer (Same day – recommended in time-sensitive cases)
Use wire transfer when:
Payroll submission deadline is within 5 days
Immediate resolution is required to remove the payroll block
Note
Wire transfers typically settle same day (within hours)
Wire transfers may incur a pass-through fee of $10 per wire
After you confirm the Wire transfer option, Zenoti displays the wire instructions on screen. You can also view the wiring instructions later from ZIP Dashboard → Company Transactions → Failed debit transaction → Actions → Wire Details.
Once the wire is received:
The payroll block is removed
Employee and tax payments resume
Payroll operations return to normal
Option 2: ACH re-debit (3–5 business days)
Use ACH retry when:
Bank account details are correct
The failure was due to a temporary issue (e.g., insufficient funds, daily limits, account unavailable)
You have enough time before your next payroll deadline
Note
ACH retries take upto 5 business days to settle
Confirm the Funding bank account before submitting
The payroll block remains until the ACH debit successfully settles, which could take upto 5 business days including the reversal waiting period
Automatic retry attempts
Zenoti may automatically retry the failed debit if:
The retry occurs on business day 5 and day 10 after the original failure if the failure returned with ACH codes R01 (Insufficient Funds) or R09 (Uncollected Funds)
We attempt the retry at 8 PM ET
There is no fee for automatic retry failures
Automatic retries are skipped if you have already initiated a wire or manual retry
Frequently asked questions
Q. Why did my payroll funding fail?
A. The most common reasons include insufficient funds, incorrect or outdated bank details, blocked ACH access or a closed or restricted account.
Q. Will my employees still get paid?
A. Yes, in most next day payrolls, employee payments still succeed even after a funding failure.
Q. Can I fix this myself in the product?
A. Yes. You can retry the debit directly in ZIP through Company Transactions using ACH or wire transfer.
Q. What’s the best way to resolve a failed funding?
A. Wire transfer is recommended when payroll deadlines are close because it settles within hours. ACH retries may take up to 5 business days.
Q. Can I retry the debit from my bank account?
A. Yes. You can retry using ACH or choose wire transfer if you need faster resolution.
Q. Will I be charged a fee for failed funding?
A. Yes, a $100 NSF (Non-Sufficient Funds) fee applies per failure.
Q. What happens if I don’t resolve it?
A. You cannot run or preview payroll. Tax filings are paused. Zenoti may initiate collections and remove ZIP access.
Q. What are automatic retry rules?
A. Zenoti retries failed debits on day 5 and day 10 after failure—but only for return codes R01 and R09. There’s no fee, and retries won’t run if another fix is in progress.
Key terms
Term | Description |
|---|---|
Processing | A payroll funding attempt that is currently being executed. |
Failed Funding | A funding attempt that did not successfully complete. |
Retry | Option used to attempt the failed funding transfer again. |
View | Option that opens the transfer details and Attempts History. |
Complete Transactions Screen | Page where you can see business details, bank accounts, transfer attempts, and retry options. |
Attempts History | A list of previous transfer attempts and their results. |
Default Bank Account | The primary bank account used for payroll funding for the selected business. |