Bank Errors
What are bank errors?
In the event of a payment issue or failure, the receiving bank (the customer/employee/contractorโs bank) will send a bank error code to our system to notify us of the problem. When this happens, the admin and impacted employee/contractor (if applicable) are notified to resolve the specific error. There are two different types of bank errors: โRโ errors and โCโ errors. Click here for a full list of ACH Codes.
"R" Errors
โRโ errors usually mean that the payment attempt was unsuccessful, and the money did not ultimately move as intended. Further research is required to see if Gusto will automatically reverse the payroll, re-attempt the transmission, etc. Who has the funds? This depends upon the payment direction.
- If the payment direction was a credit, then this usually means that Gusto has the funds and the intended recipient did not receive the money.
- If the payment direction was a debit, then the other party has the funds ex. the company, employee, contractor.
A few example โRโ error codes and situations indicating unsuccessful payments are listed below:
"R" Error Code | Situation |
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R01: โInsufficient Fundsโ - Gusto attempted to debit money from a bank account, but there was not enough money in that bank account to cover the instructed amount. Therefore, the receiving bank could not complete the transaction | Customer processes a payroll for $1000, but they only have $900 in their bank account. Gusto attempts to debit $1000 from the customerโs bank account. Upon receiving Gustoโs request for $1000 from this customer, the customerโs bank sends an R01 bank error back to Gusto indicating that the transaction could not be completed due to insufficient funds. |
R03: โNo Account/Unable to Locate Accountโ - Invalid bank account details. | A customerโs employee onboards with an invalid bank account number. When Gusto attempts to send this employeeโs direct deposit payment to their bank account, the employeeโs bank sends an R03 bank error to Gusto indicating that the transaction could not be completed because the bank account number is incorrect. |
R08: โPayment Stopped or Stop Payment on Itemโ - Recipient instructed their bank to block the transaction. | The customer processed payroll and overpaid an employee. The customer reversed the payroll, and Gusto attempted to pull the overpaid funds from the employeeโs bank account. However, the employee instructed their bank not to release the funds to Gusto. Therefore, the employeeโs bank would send an R08 bank error to Gustoโs bank indicating that the individual placed a stop payment on the debit attempt. |
"C" Errors
โCโ errors, also called โNotification of Changeโ codes or โNOCsโ, are informational-only and mean that the money did eventually make it to the correct recipient and although there was a slight error in the payment instructions, the receiving bank was able to re-route and successfully process the funds to the correct bank account. The receiving bank also provides Gusto with the corrected information, and our system automatically updates the bank account information on file so that future payouts will not be affected. Who has the funds? This depends upon the payment direction.
- If the payment direction was a credit, then the intended recipient should have received the funds. Depending upon their bankโs processing times, the recipient may experience a slight payment delay.
- If the payment direction was a debit, then Gusto has the funds.
A few example โCโ error codes and situations that require attention indicating banking details have changed are listed below:
"C" Error Code | Situation |
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C01: โIncorrect bank account numberโ - The company/employee/contractor added an incorrect bank account number or formatted it incorrectly. However, the receiving bank was able to determine the correct bank account number and still post the funds to the intended recipientโs account. | Employee banks with Chase and enters their bank account number as 12345, but the correct bank account number is 123456. Even though Gustoโs payment instructions are for account number 12345, Chase identifies the correct account number as 123456 and posts the direct deposit payment there instead. Chase sends Gusto a C01 bank error specifying 123456 as the corrected information. Gustoโs system updates the employeeโs bank account number from 12345 to 123456 accordingly. |
C04: โBank account name changeโ - The company/employee/contractorโs name on file with Gusto is different from their bank account setup. However, the receiving bank was able to determine the correct bank account and still post the funds to the intended recipientโs account. | The employee onboards as โMike Smithโ, but their bank account is under โMichael Smithโ. Even though Gustoโs payment instructions are for โMike Smithโ, the employeeโs bank applies the payment to โMichael Smithโ bank account. |
When are bank errors received?
These error codes are usually sent by the receiving bank within 3 business days from when the transaction was processed.
- For debits with bank errors: Bank error should appear by the โPayment Dateโ of the transmission, which should be 2 business days from the payment_event_check_date.
- For credits with bank errors: Bank error should appear 3 business days after the "Created At" date or 2 business days after the payment_event_check_date.
Variance in Error Codes
The vast majority of error codes are sent within 3 business days. However, occasionally, these errors can be sent over a 30 day period.
Updated 5 days ago