Year-to-date figures and reconciliation¶

Payroll reports often show two kinds of number. One is the total for a single pay — what you paid this week or this fortnight. The other is the year-to-date total — the running total for the whole financial year so far. Both are useful, but they answer different questions.

Once you have those running totals, a good habit is to reconcile them. Reconciling just means checking that your payroll totals agree with each other across your different records. If they agree, your figures are consistent. If they do not, you have found a problem early — which is exactly what you want.

In one line

Year-to-date figures are the running totals for the year so far, and reconciling means checking those totals agree across your payroll records.

Why this matters¶

Payroll produces numbers in several places — each pay run, the information sent to the ATO, and the amounts you report and pay on your activity statement. If a mistake creeps into one of those places, it can quietly grow all year until it becomes a much bigger job to untangle at the end of the financial year. Checking that your totals agree, a little at a time, catches most mistakes while they are still small and easy to fix.

What you will learn¶

What year-to-date figures are
What it means to reconcile your payroll
Why reconciling regularly catches errors early

Understanding the concept¶

Year-to-date — often shortened to YTD — means the running total from the start of the financial year up to now. In Australia the financial year runs from 1 July to 30 June. So on a pay in October, the year-to-date gross pay is everything an employee has earned since 1 July, added together. The three figures people watch most closely year-to-date are gross pay (total wages), tax withheld (the PAYG amounts taken out), and super (the amount earned for the employee's super fund).

Reconciling means checking that two or more sets of records agree. In payroll, you are usually checking that the same total shows up the same way in different places, for example:

what your payroll reports add up to for the year so far, and
what you have reported to the ATO through Single Touch Payroll (STP) — the system that sends wage, tax and super information each time you pay staff, and
what you have reported and paid on your activity statement (the form on which a business reports amounts such as the tax withheld from wages).

When those totals match, your records are consistent. When they do not, the gap is a clue that something needs a closer look — perhaps a pay was missed, entered twice, or corrected in one place but not another.

For accountants & bookkeepers

A practical month-end or quarter-end check is to tie the payroll summary's year-to-date gross and PAYG withholding to the STP figures the ATO holds, and then to the W1 and W2 labels reported on the activity statement for the same period. Differences usually trace to timing (a pay run finalised in a different period), an unfinalised or amended pay run, or an out-of-cycle adjustment. Reconciling each period keeps the end-of-year finalisation from becoming a single large investigation.

Example¶

Sam runs a small business with three staff. At the end of each quarter, Sam opens the payroll report and notes the year-to-date gross wages and the total tax withheld. Sam then compares the tax-withheld total against what was reported and paid on the activity statements for the same period. One quarter, the two figures do not match. Because Sam checks every quarter, the gap is small, and it turns out one pay run was accidentally counted twice. Sam fixes it straight away. Had Sam not reconciled until the end of the year, that same error would have been buried under nine more months of pays.

Common mistakes¶

Confusing the single-pay total with the year-to-date total — they answer different questions.
Only checking figures once a year, at finalisation, when a small error has had months to grow.
Fixing a mistake in one place (say, a pay run) but not checking it flowed through to the other records.
Assuming the totals must be right because the software produced them — reconciling is how you confirm it.

How this works in myaccountant¶

In the app — payroll reports show both the per-pay amounts and the year-to-date running totals for gross pay, tax withheld and super. Because myaccountant lodges your STP information and produces your payroll reports from the same pay runs, you can compare the year-to-date figures on your payroll report against what has been reported, and against the tax-withheld amounts on your activity statement, to check they line up.

Key points¶

Year-to-date (YTD) figures are the running totals for the financial year so far.
The financial year in Australia runs from 1 July to 30 June.
The main year-to-date figures are gross pay, tax withheld and super.
Reconciling means checking your payroll totals agree across your records.
The records you check include payroll reports, STP, and your activity statement.
Reconciling regularly catches errors while they are still small and easy to fix.

Learn next¶

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

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