Preparing for Payroll Cycle Balancing

As you process the payroll cycle, use the Earnings and Deductions Calculation (PR140), Payroll Register (PR141), Payroll Close (PR197), and General Ledger Posting (PR198) to verify totals and prepare for month-end, quarter-end, and year-end balancing.

To prepare for payroll cycle balancing

  1. Access Earnings and Deductions Calculation (PR140).
  2. Run the report. Calculating tip credit records (U.S. and CA)
  3. Access Payroll Register (PR141).
  4. Run a detailed register of earnings and deductions for all payments. Payroll Register (PR141) includes all payments that have not been closed by Payroll Close (PR197). Creating the Payroll Register (U.S. and CA)
  5. Access Payroll Close (PR197).
    Note: Running Payroll Close (PR197) in both Report mode and Update mode provides a report. However, running PR197 in Report mode before Update mode allows you to verify the transactions.
  6. Run the report in Report mode to receive and verify the report of GL transactions. If transactions in Report mode are correct, you will later run the report in Update mode after completing balancing for the payroll period. Balancing a payroll cycle
  7. Create an Excel or Lotus spreadsheet of all Payroll Register (PR141) totals to use in month-end, quarter-end, and year-end balancing using PR141 as your source document.

    Enter totals from PR141 into the spreadsheet. Below is an example of how to format the spreadsheet and what data to track from each PR141 prepared during the payroll cycle. Since we recommend closing voids, manual adjustments, and manual payments separately from the normal cyclical closings, you must maintain a record for all transactions, including those closed outside of the payroll cycle on this spreadsheet.

    Payment Date Gross Fed. Txbl. Med. Txbl. Fed. W/H SS W/H Med. W/H MN St. W/H Net Pay
    Ex. 02/09/01
    Ex. 02/23/01
    Special Runs (list below by date)
    Ex. 03/12/01
    Ex. 03/20/01
    1st Quarter Totals - - - - - - -
    Ex. 03/02/01
    Ex. 03/16/01
    Ex. 03/30/01
    Special Runs (list below by date)
    2nd Quarter Totals - - - - - - -
    Grand Total All Quarters
  8. Check PR141 totals on the spreadsheet to verify that all payroll transactions balance. Consider the following information when verifying PR141 totals.
    For Verify
    U.S. and Canada Total of all earnings equal Gross Pay.
    U.S. and Canada Gross Wages less employee deductions equal Net Pay.
    U.S. Gross Pay less Pre-Tax Deductions equals FICA taxable.
    U.S.

    Gross Pay less Pre-Tax Deductions and 401(k) equals Federal Taxable and State Taxable Wages.

    Note: Taxability of deductions and 401(k) can differ between Federal and individual states. These can also differ from state to state.
    U.S. FICA Withholding equals 6.2% (Social Security) and 1.45% (Medicare) of FICA Taxable Wages.
    Canada Gross Taxable Income equals gross earnings plus taxable benefits less RRSP.
    Canada Net Taxable Income equals Gross Taxable Income less allowable exemptions.
    Canada Gross Taxable Income equals CPP/QPP Taxable Income.
    Canada CPP/QPP Withholding equals the rate issued to you by Revenue Canada multiplied by Pension Earnings.
    Canada EI (Employee Insurance) Employee Withholding equals the rate issued to you by Revenue Canada multiplied by Insurable Earnings.
    Canada EI Company Withholding equals the rate issued to you by Revenue Canada multiplied by Insurable Earnings.
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