Match Payroll Records Before Closing the Year
Yes, a year end review should compare payroll reports with the wages, employer taxes, benefits, payments and payroll liabilities recorded in the books. This is bookkeeping reconciliation, while payroll processing and tax filings remain with the responsible payroll provider or tax professional.
Match gross payroll, not just the bank withdrawal
The amount taken from your bank may combine employee take home pay, withheld taxes, employer taxes and provider fees. Recording that entire withdrawal as wages can misstate expenses and liabilities. Review payroll summaries alongside the accounting entries so each component lands in the appropriate account, without recording payroll costs again when tax payments clear.
Investigate balances still waiting to clear
Payroll liabilities can remain at year end when a payment is due in the following period. They can also reflect missing entries or a duplicated import. Compare outstanding amounts with the provider’s reports and payment confirmations. Do not erase a balance simply because the calendar year ended, and do not infer that a liability was paid from the expense total alone.
Preserve the documents behind the totals
Save payroll summaries and the relevant filing and payment records through the approved recordkeeping process. IRS guidance requires retaining employment tax records for at least four years, with timing rules that depend on the record. Employee corrections, compensation decisions and filing discrepancies should go to the payroll provider or qualified tax professional. A bookkeeper can document the difference and reflect approved corrections in the accounts.