# Payroll Reconciliation > Payroll reconciliation is the check that confirms the tax withheld, contributions remitted and wages paid across every pay run in a period match the totals reported in the statutory filings sent to each country's tax authority, catching gaps before they become penalties. Payroll reconciliation is the process of confirming that what was paid and withheld through payroll matches what is reported to the authorities. Across a period, it checks that total wages, tax withheld and employer contributions in the payroll records line up with the amounts remitted and declared in statutory filings. The check matters most at period and year end, when annual returns must agree with the sum of every pay run. If a single cycle was corrected off schedule, or a figure was posted twice, reconciliation is what surfaces the difference before a tax authority does. It turns many separate runs into one consistent account. In multi-country payroll, reconciliation is harder because exchange rates add a moving part. The rate used to calculate pay can differ from the rate at which money was actually sent, creating variances that look like errors. Reconciling these deliberately keeps the year's numbers explainable and the filings defensible. ## What does payroll reconciliation actually check? That three sets of numbers agree: what payroll calculated, what was actually paid and remitted, and what is reported in statutory filings. It confirms wages, tax withheld and employer contributions match across all three. Where they do not, reconciliation shows exactly where a run, a correction or a remittance went astray. ## When should payroll be reconciled? Ideally after every run, and always at period and year end. Reconciling each cycle catches errors while they are small and easy to trace. The year-end check is non-negotiable, because annual returns to the tax authority must equal the sum of every pay run, and any gap has to be explained before filing. ## Why is reconciliation harder across multiple countries? Because currency adds a moving part. The exchange rate used when pay was calculated may differ from the rate when money was sent, so totals can diverge without any real error. Add different filing formats and deadlines per country, and the reconciliation has to account for each variance rather than assume a mismatch is a mistake. ## Key facts - **US year-end reconciliation deadline:** In the United States, employers must file Forms W-2 and W-3 with the Social Security Administration by 31 January, and the fourth-quarter Form 941 falls on the same date, so full-year payroll totals must reconcile by then. (Source: Internal Revenue Service, verified 2026-07-28) ## Frequently asked questions ### What is the difference between reconciliation and an audit? Reconciliation is your own routine check that payroll numbers agree across records, payments and filings. An audit is a formal review, often external, that tests those numbers against evidence. Good reconciliation is what makes an audit straightforward, because the figures already tie out and the differences are already explained. ### What happens if payroll does not reconcile? An unreconciled gap means the amount paid or withheld does not match what was reported, which can lead to corrected filings, interest and penalties. Finding the cause, whether a duplicate posting, a missed off-cycle run or an FX variance, before the deadline is far cheaper than a tax authority finding it later. ### How does an EOR handle reconciliation for me? An Employer of Record runs payroll and files in each country, so it reconciles the pay runs against the local remittances and returns as part of that service. You should still expect clear reporting that lets you see the totals tie out, rather than taking the numbers on trust. ## Sources - [Employment tax due dates](https://www.irs.gov/businesses/small-businesses-self-employed/employment-tax-due-dates), Internal Revenue Service _Last updated 2026-07-28. Reviewed by Teamed's in-house employment-law team. Source: https://www.teamed.global/glossary/payroll-reconciliation_