Payroll Reconciliation | Meaning and Definition

What is Payroll Reconciliation? 

Payroll reconciliation meaning is the process of checking payroll transactions and comparing the current payroll to the prior one in order to ensure that payroll is computed correctly and without errors. It is the process of maintaining a company’s financial health by keeping accounting, reporting, and calculations precise and error-free.

During Payroll Reconciliation, it is assured that the right amount of salary is computed for each employee and entered into the ledger. All payroll accounting transactions, costs, obligations, and computations must be accurate for payroll reconciliation.


The way you or your team handles payroll sends out signals about your company’s financial stability. Employees, job seekers, customers, investors, and banks—anyone who interacts with your company will be harmed by a badly managed payroll system. Furthermore, if your staff is not left wondering when they will be paid next, you are more likely to establish deeper ties with them.

Payroll reconciliation, in particular, is beneficial to your company during audits. It ensures that you always have an exact record of all payroll activities, making compliance and tax reporting a snap.

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