Employee Payroll Amount is Different than Bank Statement Amount

You can resolve a $0.01 discrepancy in QuickBooks Desktop by creating an automatic adjusting entry during reconciliation to ensure the account is balanced.

Here’s how:

1. Go to the Banking menu, select Reconcile.
2. Enter the necessary details, such as the account, statement date, beginning and ending balance.
3. Click Continue to open the Reconcile window.
4. Select all the transactions that match your bank statement, then click Reconcile Now.
5. Once you get prompted that there's a penny discrepancy, select Enter Adjustment.
6. You can click Display to review the reconciliation report.

QuickBooks Desktop and banks sometimes differ by a penny when processing payroll totals. This is due to rounding on taxes calculated at exact rates, such as Social Security and Medicare.

Our system ensures that the employee's YTD totals for those taxes are always exactly correct. You and the employee don't need to be concerned about these small variations.

If you need additional help with reconciliation or related issues, please respond to this thread. I'm here to assist you.

The adjustment above will get the month reconciled, but it's worth finding the penny first, because a reconciliation adjustment posts to a "Reconciliation Discrepancies" expense account and doesn't fix the payroll record behind it.

Where a one-cent payroll difference usually comes from:

1. One paycheck, not the total. If the bank cleared the payroll as one direct deposit batch, open the bank's detail for that batch and compare each employee's amount to the net pay on your Payroll Summary report. Usually a single check is off by a cent.
2. Rounding on a deduction. Percentage-based deductions (401(k), garnishments) get rounded per check, and the provider can round differently than QuickBooks did.
3. A tax or liability payment mixed in. If the bank amount includes taxes, run a Payroll Liability Balances report for the month. A one-cent balance left on a tax item means the payment and the liability didn't match.

Once you find it, fix it where it lives. Adjust the paycheck or the liability in QuickBooks so it matches what the bank actually paid, and the payroll reports stay right.

If you can't find it and it's truly a one-off cent, the reconciliation adjustment is fine. Just change that adjustment's account from Reconciliation Discrepancies to your payroll expense account so it lands with payroll.