Free Payroll Reconciliation Template (Excel)
What's in the payroll reconciliation template
The template is a single Payroll Reconciliation table with one row per pay period. You enter gross wages, employee deductions, and employer taxes, then the amount that actually posted to your general ledger and the amount the bank debited.
From those inputs, the sheet calculates net pay, the variance between the GL and bank amounts, and a check column that reads PASS or FAIL for each period — so you can scan a full year of pay periods and immediately see which ones need attention.
A summary block at the bottom rolls up YTD gross wages, YTD employer taxes, and a count of periods that failed reconciliation, which is what you'd hand to a controller or CPA reviewing the year.
What calculates automatically
Net pay computes the moment you enter gross wages and deductions. Once you fill in the GL-posted and bank-debited amounts, the GL variance, bank variance, and the PASS/FAIL check all update instantly.
The FAIL flag is deliberately strict: it only shows PASS when both variances round to exactly zero, so a one-cent rounding difference still gets flagged for you to look at rather than silently passing.
What this template does not automate
This is a period-by-period GL and bank tie-out, not a W-2 reconciliation tool — it doesn't pull or compare year-end W-2 totals automatically. The YTD gross wages figure in the summary is the number you'd compare by hand against your W-2 totals at year-end, as a manual final check rather than an automated match.
If you also need to record the actual payroll journal entry into your general ledger, that's a separate step this file doesn't do — see the paired Payroll Journal Entry template for that.
Who this is for
Bookkeepers and small-business owners who process payroll themselves and want a repeatable check that what the payroll provider reported actually matches what hit the bank and the books, before closing the period.
It's also a useful pre-year-end habit: reconciling every pay period as you go means you're not trying to explain twelve months of unreconciled variances in a single sitting each December.
How to use it
- One row per pay period: gross wages, deductions, employer taxes and net pay.
- Enter what hit the GL and the bank — variances calculate and flag automatically.
- Investigate any FAIL row before closing the period.
- At year-end, compare the YTD gross wages total against your W-2 totals as a manual final check.
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Small Business Bookkeeping & Tax Dashboard
For the rest of your books, the paid Bookkeeping template ($19) adds Schedule C categorization, a quarterly tax dashboard, and a CPA-ready export your accountant can use at tax time.
See the full versionFrequently asked questions
Can I use this payroll reconciliation template in Google Sheets?
Yes. Upload the downloaded file to Google Drive, then open it and choose File > Save as Google Sheets. All the formulas and the PASS/FAIL flag keep working.
Is this template really free?
Yes. You give an email address to download it, and then it's yours to use with no further cost.
Does it reconcile against my W-2 totals automatically?
No. The YTD gross wages figure in the summary is a manual comparison point — you check it against your W-2 totals yourself at year-end. There's no automated W-2 import or match.
What does the FAIL flag actually check?
It compares the amount posted to your GL and the amount debited from your bank against your calculated net pay for that period. If either variance rounds to anything other than zero, the row shows FAIL.
Does this also create the payroll journal entry?
No, this file only reconciles amounts that already posted. To record the journal entry itself, use the separate Payroll Journal Entry template.