Month-End Close

Monthly payroll tie-out: gross to net and tax liability by jurisdiction

Reconcile gross to net every pay date and payroll tax liability by jurisdiction every month, so a missed deposit, an unregistered state or an outdated SUI rate shows up this month instead of in an agency notice later. The workbook does the math; AI maps the exports and drafts the exceptions memo.

Time
About 45 minutes a month once set up
Level
Intermediate
Works with
Excel, Claude, ChatGPT, Microsoft Copilot

What you need

  • Payroll register for every pay date in the month: employee ID or name, work state, gross, each tax, each deduction and net
  • The payroll provider's tax liability and deposit report, by tax and jurisdiction
  • GL detail for payroll expense and payroll liability accounts
  • Bank activity for net pay funding and tax debits
  • The free Payroll Tie-Out Workbook (download on this page)

Steps

  1. Export the four reports for the month. Leave out SSNs, bank account numbers and home addresses; the tie-out doesn't need them.
  2. On the workbook's Start Here tab, set the month-end date, your federal deposit schedule (monthly or semiweekly) and your rounding tolerance.
  3. Paste the prompt below into your AI tool with the exports attached. It maps your provider's columns to the workbook's columns and returns rows ready to paste.
  4. Paste the rows into the yellow cells of each tab. The formulas do every check; the AI never does the arithmetic.
  5. Open Summary. Every line should say OK. Paste the Summary tab and the flagged rows back into the same chat and ask for the exceptions memo (step 2 of the prompt).
  6. A person works each exception, makes any late deposits or corrections, and signs off before the books close.
  7. At quarter end, also tie the register to Form 941 and the state returns before they're filed.

The prompt

Fill in the highlighted brackets
You are a payroll accountant helping me with the monthly payroll tie-out. You map data and explain results. You do not do the arithmetic: the workbook's formulas do every calculation.

Context:
- Company: [company name or description]
- Month: [month and year]
- Payroll provider: [ADP / Paychex / Gusto / other]
- Federal deposit schedule: [monthly / semiweekly]
- States where employees work: [list]

Attached: the payroll register, the provider's tax liability and deposit report, GL detail for payroll accounts, and bank activity for the month.

Step 1. Map the exports to the workbook. Return one table for each tab, with exactly these columns, ready to paste:
- Gross to Net: Pay date, Gross wages, Pre-tax deductions, EE federal income tax, EE Social Security, EE Medicare (incl. Additional), EE state income tax, EE local tax, Post-tax deductions, Net pay per register, Bank net-pay funding
- Register to GL: Line, Per register, Per GL (lines: gross wages expense, employer payroll tax expense, net pay, 401(k) withheld, health and other deductions withheld)
- Deposits: Pay date or period end, Jurisdiction, Tax, Amount due, Due date (leave blank for Form 941 rows), Amount deposited, Deposit date
- Employees: Employee ID, Name, Work state
- Wage Bases: Employee ID, YTD Social Security wages, YTD SS withheld, YTD Medicare wages, YTD Additional Medicare withheld
- Benefits: Pay date, Deduction, Withheld, Remitted, Remit date
Copy amounts exactly as they appear in the exports. Do not total, round or estimate. If a column can't be found, leave it blank and list it under MISSING. If a source column's meaning is unclear, list it under QUESTIONS instead of guessing.

Step 2. When I paste back the Summary tab and the flagged rows, write a one-page exceptions memo:
1. One line on overall status.
2. For each exception: what it is, the amount, the jurisdiction or employee ID, the likely cause in plain English, and the next action and who usually owns it (us, the payroll provider, or the agency).
3. Put anything with penalty exposure first: past-due deposits, late deposits, missing state accounts and late 401(k) remittances.
4. Use only numbers that appear in what I pasted.
5. End with items to confirm with the payroll provider.

Do not give tax or legal conclusions. Where a rule depends on the jurisdiction, say so and suggest confirming it with the provider or a tax adviser.

Review before you use it

  • Spot-check three mapped amounts per tab against the source exports before trusting the paste.
  • Every exception in the memo matches a line on Summary that isn't OK, and every number in the memo appears in the workbook.
  • Federal Form 941 due dates come from your deposit schedule; state, local, SUI and FUTA due dates were typed from each agency's schedule.
  • Rates and wage bases on Start Here and Registrations are current for this year.
  • Late or missing deposits are paid and documented, and the payroll provider has been asked why.

Never paste into an AI tool

  • Social Security numbers or other tax IDs for employees
  • Bank account and routing numbers
  • Employee home addresses, dates of birth or medical information
  • Agency login credentials or PINs

Tips

  • Run it as a scheduled task: the same folder, the same prompt, and a memo in your inbox on the 5th.
  • A full-service provider deposits and files for you, but registration gaps and outdated SUI rates are generally the employer's responsibility. That's why this check still matters.
  • Remote hires are the most common source of new-state exposure. Register before the first payroll in a new state.

Educational content, not professional advice. AI output can be wrong; review it before relying on it. Disclaimer

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