Payroll, bank and ledger reconciliation: the CFO’s three-way control

Published by SESAY · 2026-10-23 · General Australian payroll guidance

What to understand first

A successful payroll calculation or accepted Single Touch Payroll submission does not, by itself, prove that employees received the right amounts or that Finance recorded the pay run correctly. From 1 July 2026, employers continue reporting payroll information through STP each time they pay, including salaries and wages, PAYG withholding and the expanded super information required under Payday Super. Fair Work also requires employers to keep specified time and wage records for seven years. A practical CFO control therefore connects four views: the approved payroll register, payment evidence, the payroll journal and statutory reporting. Differences should remain visible until someone identifies their cause, corrects the affected record where necessary and documents the resolution.

Practical checks

• Freeze the approved payroll population and totals before payment: employee count, gross earnings, PAYG withholding, employee deductions, net pay and employer liabilities. Record authorised off-cycle payments separately.
• Reconcile the expected net pay to the bank file and actual bank debits. Check rejected, returned, duplicated, manually paid and split payments rather than clearing a variance only because its value is small.
• Reconcile the payroll journal to the approved register by entity, cost centre and control account. Keep employee deductions, PAYG withholding, super liabilities and net wages in distinct accounts where the accounting design requires them.
• Compare STP pay-event totals and employee population with the final payroll register. An accepted submission confirms receipt by the ATO; it does not independently validate award interpretation, hours, rates or the bank payment.
• Review a signed exception report after payday. Assign each difference an owner, reason, correction method and due date, then confirm it is cleared in both payroll and Finance records.

Fictional example

A fictional fortnightly payroll register shows $285,400 gross pay, $64,300 PAYG withholding and $2,100 of other employee deductions. Expected net pay is therefore $285,400 − $64,300 − $2,100 = $219,000. The main bank debit is only $218,250, leaving a $750 difference. Finance does not post the difference to an unexplained rounding account. The review finds one authorised $750 manual EFT that was paid separately after a bank-detail exception. Adding $218,250 + $750 gives $219,000, so the cash total now agrees. The team links the separate payment approval to the reconciliation and checks that the employee, STP event and payroll journal all reflect the same final outcome. Employer super and employer taxes are outside this simplified net-pay equation and are reconciled separately.

Your next step

Ask for a one-page payroll control pack for every cycle. It should show the approved population, gross-to-net bridge, bank-file and bank-debit totals, journal totals, STP status, super funding or receipt status, and open exceptions. Compare current and prior cycles so unexpected movements in employee count, overtime, allowances, termination payments or deductions are investigated. Define who prepares, reviews and authorises each part; avoid allowing the same person to change payroll data, release the bank payment and close the reconciliation without independent review. Retain evidence in line with applicable employment, tax, privacy and corporate record requirements.

How SESAY can help

SESAY can help CFOs and payroll leaders design cycle control packs, map payroll-to-ledger accounts, create variance reports and document preparation, review and escalation responsibilities within an agreed scope. SESAY support does not replace the organisation’s authorised payment approver, accountant, auditor or legal and tax advisers.

Official sources

• ATO — Single Touch Payroll reporting under Payday Super
• ATO — Paying and reporting PAYG withholding amounts
• Fair Work Ombudsman — Record-keeping

Sources researched 2026-10-23. Examples are fictional and use stated assumptions. Confirm current rules and your circumstances before acting. This is general information, not individual tax or legal advice. SESAY is independent of the regulators linked here.