Templates / Payroll reconciliation
Payroll Reconciliation Template
Compares what the payroll system paid out to what actually landed in the ledger.
What it is
A payroll reconciliation template compares the numbers your payroll provider reports (gross pay, deductions, net pay) to the numbers posted in your general ledger for the same pay run. The two should match exactly, since the payroll system is the source of truth for what was actually paid. When they don't, the usual causes are a manual adjustment made in one system and not the other, a pay run that straddles two accounting periods, or an integration that dropped a component like a bonus or a reimbursement.
This is worth checking every pay run, not just at month end, because payroll differences are expensive to leave unresolved: they show up as under- or over-accrued payroll liabilities, and they're awkward to unwind once an employee has been paid the wrong net amount. A short reconciliation after each run, employee by employee where the totals don't match, catches the problem while it's still one pay period's worth of detail instead of a quarter's.
For businesses running payroll through a third-party provider, most of this data is available as a payroll register export. Line it up against the payroll journal entry your accounting system posted for the same period.
Columns
| Column | What it holds |
|---|---|
| Employee | Employee name or ID for the pay run being checked. |
| Gross Pay | Gross wages per the payroll system. |
| Deductions | Total withholdings and deductions per the payroll system. |
| Net Pay | Net pay actually disbursed to the employee. |
| Payroll System Total | The payroll provider's reported total for this line. |
| Ledger Total | The corresponding amount posted in the general ledger. |
| Difference | Payroll system total minus ledger total. |
How to use it
- 1.Export the payroll register for the pay run from your payroll provider.
- 2.Pull the payroll journal entry your accounting system posted for the same run.
- 3.Line up gross pay, deductions, and net pay by employee between the two.
- 4.Add a totals row and confirm the grand totals match before checking individual employees.
- 5.Investigate any employee-level difference: a manual override, a missed reimbursement, or a period cutoff issue are the most common causes.
- 6.Book a correcting entry for any real difference and note it so next period's total is not thrown off again.
Skip the spreadsheet
A spreadsheet works, but it doesn't match lines for you or remember what you did last month.