Hearts have been placed under a Scottish Premier League transfer embargo after failing to pay "a number of players" on time.
Wages were due on Friday, but managing director David Southern warned earlier in the week of a possible default as board members struggle to keep the club in business.
And a statement from the SPL confirmed Hearts will be banned from making new signings until players have been paid.
The statement read: "This is a Remuneration Default in terms of the SPL Rules and the Club is therefore subject to an automatic transfer embargo while that Remuneration Default continues.
"The actions also indicate a potential breach of SPL rule A6.21 and a disciplinary hearing will be convened in due course."
Hearts' immediate priority is to sell players rather than buy them, and a club statement issued this week confirmed every squad member is available at the right price.
Money in unpaid tax is still owed to Her Majesty's Revenue and Customs, and supporters have been warned Hearts face a fight to survive the summer unless a "shortfall in funding" is urgently addressed.