Reconciling payroll before you finalise¶

Before you send your end-of-year payroll to the Australian Taxation Office (ATO), it pays to stop and check the numbers. This checking step is called reconciling. Doing it well is the single best way to avoid problems later.

This lesson explains what reconciling means, which totals to check, and why it is worth the time before you finalise.

In one line

Reconciling means checking your year's totals — gross wages, tax withheld and super — are right and match your records before you send your finalisation.

Why this matters¶

The ATO asks you to check that each employee's year-to-date amounts are correct when you make your finalisation declaration. Once you finalise, those figures flow through to your employees' income statements and their tax returns. A mistake can still be fixed, but it means more work and can confuse your staff. Checking first is faster than fixing later.

What you will learn¶

What "reconcile" means in plain terms
Which totals to check before finalising
Why checking before finalising matters

Understanding the concept¶

Reconcile simply means to compare two sets of figures and make sure they agree. If your payroll software says you paid a certain amount of wages for the year, and your own records (like your bank payments and reports) say the same, the two are "reconciled". If they do not match, something needs looking into before you go any further.

At end of financial year, there are three main totals to reconcile:

Gross wages — the total pay for the year, before anything was taken out. This should match what actually went out to your employees plus the tax you held back.
PAYG withholding — the total tax you took out of pays and sent to the ATO through the year. PAYG stands for pay as you go. This total should match what you have reported and paid.
Super — the super you worked out for your employees. Check the amounts are right and that they have been paid to the funds.

The ATO suggests treating this like the check you already do before paying staff — a standard step to make sure the data is true and correct. You are not looking for trouble; you are confirming everything lines up before you press finalise.

For accountants & bookkeepers

A common year-end error the ATO flags happens when a business changes payroll software partway through the year and carries year-to-date figures across without zeroing the old system or advising the previous software identifier — this can double up totals. Reconciling gross, withholding and super against your ledger and payment records before finalising is how you catch this before it reaches an income statement.

Example¶

A florist with two staff sits down in early July. She compares the year's gross wages in her payroll software against her reports and bank records — they agree. She checks the total PAYG withholding matches what she reported and paid to the ATO through the year — it agrees too. Last, she confirms the super worked out for both employees has been paid to their funds. Everything lines up, so she is confident to finalise. Had a figure been out, she would have found the cause and fixed it first.

Common mistakes¶

Skipping the check and finalising straight away, then having to correct it.
Only looking at gross wages and forgetting to reconcile tax withheld and super.
Confirming super was calculated but not that it was actually paid to the funds.
Carrying totals from old payroll software without checking they are not doubled up.

How this works in myaccountant¶

In the app — myaccountant gives you reconciliation reports and year-to-date totals for gross wages, PAYG withholding and super, so you can compare them against your records. The end-of-year finalisation flow lets you review each employee's totals before you mark your STP data as finalised.

Key points¶

To reconcile is to check two sets of figures agree.
Reconcile gross wages, PAYG withholding and super before finalising.
Confirm super was not just calculated but actually paid to the funds.
The ATO asks you to check year-to-date amounts are correct before finalising.
Fixing an error after finalising is more work than catching it first.
Treat it like the check you already do before paying staff.

Learn next¶

General information only — not tax, super or financial advice.

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