Balancing
Ensure accurate tax calculations through Check's balancing process for payroll management.
What is balancing?
After the end of every quarter, Check performs a process called “balancing”, in which the taxes that were calculated throughout the quarter (or imported on external payrolls) are adjusted for accuracy and alignment with agency rules.
For example, if a tax has a fixed rate, then balancing will ensure that the tax amounts withheld in the quarter equal the total taxable wages for the quarter multiplied by that rate. Or for a tax like Social Security, which has a cap on wages that can be considered “taxable” in a given year, balancing will adjust taxable wages for the tax to sure that it has not exceeded this limit.
This balancing process is essential to ensuring that Check is able to file for taxes, and prevents tax notices for the employer. And as part of this process, employers may receive a collection or refund for changes in tax amounts that this balancing process produced (i.e,. “variances”).
How does balancing work in Check?
At the end of each quarter, Check will need to collect or refund for tax adjustments that have accumulated throughout the quarter. This is a standard process in the payroll industry—taxes can fall out of balance for many reasons, such as a mid-quarter rate change or simple rounding drift over time.
Processing tax adjustments is necessary to be able to successfully file for companies at the end of the quarter.
In Check, tax variances are calculated and stored on a special type of payroll called “balancing” payrolls. These payrolls are available in draft after the first week of a quarter, and refreshed automatically every weekend. Then, on the 2nd business day after the close of the quarter, balancing payrolls are “approved” and variance collections or refunds are computed and scheduled for several days later.
Reviewing balancing payrolls
There are three (3) different reports available to you to review balancing payrolls and plan your communication to employers about upcoming variance collections. These are:
Report | Data Level | Description | Access From |
Quarterly Variance Report | Partner level | Total variances, payment amounts, and agency refund amounts for all companies across your employer base. | Console |
Tax Receipt | Company level | A per-liability breakdown of the balancing adjustments for the company, and which are fulfilled immediately vs. already paid to the agency and refunded after filing. | Console (+ Communications) |
Preview Report or Payroll Journal | Employee level | A breakdown of variances by employee and tax. | API, Console |
Quarterly variance report (Partner level)
The Quarterly Variance Report can be accessed by first navigating to the Reports tab in Console, selecting “Quarterly variance report”, and then selecting the current year and quarter.
Column definitions and examples
Column | Definition | Example Value |
Company ID | Unique identifier for the company in Check's system | com_GLNmgeXia8yioT968nSc |
Company Legal Name | Registered legal name of the company | Stark Industries |
Total Liability | Total tax variance amount on the balancing payroll | 295.12 |
Balancing Payroll | Identifier for the specific balancing payroll | pay_st1wudRlzHua3EzFqMRA |
Payroll Status | Current status of the payroll | paid |
Updated At | Timestamp of the last update to the balancing payroll | 2025-11-19T15:38:00Z |
Approved At | Timestamp of when the balancing payroll was approved | 2026-01-02T09:24:00Z |
Payment | Unique identifier for the payment transaction | pyt_HlSYFp9q8DhUhSIbJju6 |
Payment Type | Whether funds are being collected or refunded | Collection |
Payment Date | Date the payment was or will be processed | 2025-01-05 |
Payment Amount | Actual dollar amount of the payment transaction | 295.12 |
Agency Refund Amount | Portion of the liability being refunded from the tax agency after filing | 0.00 |
Writeoff Amount | Amount being written off rather than collected or refunded (applies when the Payment Amount is less than $1) | 0.00 |
The Quarterly Variance Report shows all draft balancing payrolls across companies, as well as payment amounts after the quarter is closed and balancing payrolls are approved. The most important attributes to review are:
- Total liability — the total variance amount from the balancing payroll.
- Payroll status — the status of the balancing payroll. This will move to pending once the balancing payroll is approved, processing once the transaction is sent, and paid or failed depending on the outcome of the transaction.
- Payment amount — the expected employer refund or collection amount from Check.
- Agency refund amount — the expected refund that the employer will receive from the agency after filing is completed.
The resulting transaction or pay adjustment can differ from the overall liability adjustment when funds have already been sent to the agency and cannot be refunded directly to the employer.
- If Check still holds the funds for a given tax and they exceed the amount due, Check will refund the employer.
- If Check no longer holds the funds, the amount will be over-reported on the return so that the agency can process a refund.
Tax Receipt (Company level)
As of Q1 2026, you can generate a receipt alongside every quarter-end balancing payroll that gives employers a clear, self-serve breakdown of any resulting money movements.
The Tax Receipt will be available once the Balancing payroll is approved and can be accessed via Console as a PDF this quarter end or via the API starting next quarter end (in both PDF and JSON formats).
Optionally: for partners using the direct-to-employer Communication, employers will receive an email + receipt detailing the scheduled transaction resulting from balancing (if applicable).
Preview report / Payroll journal (Employee level)
Finally, you can access a breakdown of variances by employee using either the Preview report (if the balancing payroll is still in draft), or using the Payroll journal (if the balancing payroll has already been approved).
One reason this may be important is if there are sizable variances that were calculated on employee-paid taxes, and the employer should be notified in order to reconcile those variances with employees directly. While this is uncommon, it can occur due to corrections, voids, or variances in historical data.
To access this breakdown, first navigate to the balancing payroll in Console (which you can do by searching for the payroll ID in the search bar, or by navigating to Payrolls for the company and selecting the balancing payroll for the quarter). Then, open the “…” menu in the upper right and select Export payroll journal. Console will automatically generate either a Preview report or the Payroll journal, based on whether the balancing payroll has been approved.
Understanding the root cause of tax variances
Common example causes of tax variances are:
- Mid-quarter rate changes — For example, if a company’s state unemployment rate changes mid-quarter, then payrolls that were calculated during the quarter before the rate change was entered in Check will produce a variance.
- Exemptions added or removed — If an exemption to a tax was added or removed mid-quarter, then payrolls that were already processed may produce a variance to retroactively add or remove the tax.
- Mistakes during company setup — A company’s historical payrolls may have been entered with incorrect subject wages or tax amounts.
- Rounding throughout the quarter — Simple rounding differences between calculating a tax payroll by payroll vs. in aggregate on the entire quarter may produce minor variances.
- Other agency-imposed requirements — For example, credit reduction states for FUTA are announced in November ever year, and will appear as tax variances for employers in the affected states in Q4.
- Additional variances — When Check is filing, there may be times where we realize an additional collection or refund is required, resulting in additional debits or credits to your Employers throughout the filing month.
Using draft balancing payrolls proactively
- For large expected variances, communicate early. Proactively notify employers well in advance of Quarter End.
- If the balancing preview looks wrong, escalate quickly. If you have identified the root cause of tax variances and believe that corrections are required, create a Support request with the “Corrections + Amendments” request category. Addressing it early increases the chances it can be resolved before filings.
📅 Balancing payroll approval and variance transactions
Balancing payrolls are approved on the second business day of the filing month and variance collections or refunds are scheduled for approximately 1 week later. After balancing payrolls are approved, the expected payment amount and agency refund amount become available in the Quarterly Variance Report.
Rebalancing during the filing month
It is possible that some companies will be required to be rebalanced during the filing month. The most common causes of this are corrections or voids that are processed, or corrections due to agency feedback received during filing.
When these happen, new payrolls of type “amendment” (rather than “balancing”) will be created to capture any additional variance adjustments calculated after the correction is processed.
Failing to fund a balancing payroll
If an employer fails to fund a balancing payroll, then the balancing payroll will move to a “failed” status. This can be identified using the Quarterly Variance Report, which contains a column for the Payroll Status.
This will not create a failed funding strike nor put the company in bad standing, but it is expected to block some of the company’s filings, which are dependent on tax payments being fully funded before the filing may be processed.
It is imperative to reach out to employers to fund their balancing payrolls as early as possible to avoid extended filing delays and penalties and interest. Balancing payroll transactions can be retried from Console, from the Transactions tab.
Companies in bad standing
Balancing payrolls are computed and approved for all companies with Check-managed, approved payrolls in the filing period, irrespective of standing condition. Companies in bad standing at the beginning of the filing month will still see a balancing payroll, and it will transition to a pending status on the 2nd business day of the quarter, just like all other companies.
If the company resolves their failed funding and returns to good standing before the balancing transaction is sent, then the balancing transaction will be sent as usual.
However, if the company is still in bad standing when the balancing transaction is scheduled to be sent, then it will instead immediately move to failed. You will need to retry both the original failed funding and the balancing payroll transaction from Console to return the company to good standing and unblock the company’s filings.
For more information about how to recover from failed fundings, refer to Failed Funding Guide.
Canceling variance transactions
If for whatever reason you or the employer do not wish for a balancing transaction to be processed on the scheduled date, then you have the ability to cancel the balancing payroll transaction and retry the transaction at a later time when they’re ready. This can be done from Console, on the Transactions tab.
Important: Cancelling the balancing payroll shifts responsibility to the partner. Check is no longer responsible for on-time filing once the balancing transaction is delayed from the standard timeline.