Insights
Payroll reconciliation explained
Payroll reconciliation is the discipline of proving that four independent records agree: what payroll calculated, what was declared, what was paid, and what was posted.
The four records
- The payroll register produced by the pay run
- The statutory declarations, principally the EMP201
- The actual payments made to SARS, beneficiaries and employees
- The general ledger postings — see payroll and GL reconciliation
A workable monthly routine
Reconcile the register to the journal, the statutory totals to the declaration, the declaration to the payment, and each third-party schedule to its payment. Every unexplained difference gets an owner and a due date rather than being carried forward.
What it prevents
Monthly reconciliation catches misallocated payments, missed beneficiary payments, manual journals and configuration errors while they are still small. Left for year-end, the same items become a reconstruction exercise with penalties attached.
Frequently asked questions
How often should payroll be reconciled?
Monthly. Reconciling only at the bi-annual EMP501 deadline turns small differences into large investigations.
Who should perform the reconciliation?
Someone independent of the person who captured and processed the payroll, whether that is finance internally or an outsourced provider.
What is the most common reconciliation difference?
Payments allocated to the wrong period or tax type, followed by manual adjustments made outside the payroll system.
Patuza reconciles payroll, declarations, payments and the ledger every month.
Book a consultationRelated services
- EMP201 & EMP501 reconciliation →
Monthly EMP201 declarations reconciled to bi-annual EMP501 submissions and IRP5 certificates.
- Payroll & GL reconciliation →
Payroll reconciled to the general ledger: salary expense, control accounts and payroll liabilities.
- Payroll audits →
Independent payroll audits covering data integrity, statutory accuracy, controls and risk.
Related topics
Related insights
- EMP201 vs EMP501 →
The difference between the monthly declaration and the bi-annual reconciliation.
- Payroll to GL reconciliation →
Why payroll control accounts drift and how to clear them for good.