Reconciliation of wages is the process of ensuring that payroll transactions match the amounts recorded in a company's financial statements.
This process confirms that employees are paid correctly and that all deductions and taxes are accurately accounted for.
For example, during reconciliation, an employer might compare the total wages paid to employees against the payroll records and financial reports to identify any discrepancies.
This ensures compliance with accounting standards and helps prevent errors that could lead to financial misstatements.
