Payroll summary

What it means

A payroll summary is the monthly summary report from the payroll system. It shows gross wages and their components, contributions paid by employees and the employer broken down by insurer and fund, income tax withheld, deductions from pay and the total net pay to be paid out.

While a payslip shows one employee’s figures, the payroll summary totals the whole company or cost centre. It is therefore the main basis for posting payroll, preparing payment orders to employees, insurers and the tax office, and checking that all the amounts reconcile.

The summary links payroll with financial accounting. Every line should have its counterpart in the books and in payments, and contribution totals should match the monthly returns to the Social Insurance Agency and health insurers.

How it works in practice

After processing payroll, we send clients the summary together with an overview of payments and due dates. Management can see total monthly labour costs in one place, not just the net pay leaving for employees.

Before closing the month, we reconcile the summary with the insurers’ returns, the monthly report of tax withheld for the tax office and the bank payments. Differences most often reveal an unregistered employee, a wrong insured-person code or a forgotten deduction.

The summary is also a useful budgeting tool. When kept by cost centre or project, it lets the company allocate labour costs to activities and compare them over time. It relies on accurate payroll inputs from the client, such as attendance and bonuses.

What to watch out for

A common mistake is posting payroll only from the net amounts in the bank. Contributions and tax are then missing from the books or posted in another month, distorting both labour costs and liabilities to institutions. Postings should always be based on the summary.

When correcting payroll for past months, make sure the change flows into the new summary and into corrective returns. If the fix is made only in the payroll system without follow-up steps, differences with the insurers and tax office arise that are hard to trace later.