Understanding balancing payrolls in 7shifts Payroll

At the end of every quarter, a balancing payroll appears in your Payroll History. 7shifts Payroll generates this entry automatically to reconcile taxes collected during the quarter against the final amounts owed to ensure your tax calculations remain accurate.

Things to know

Every business using 7shifts Payroll receives a balancing payroll at the end of each quarter. For most businesses, the balancing payroll nets to $0.00 and no money moves. When a difference exists between taxes collected and taxes owed (a variance), the balancing payroll appears in your Payroll History as one of two types:

• Balancing – Collection: 7shifts Payroll debits your bank account for the outstanding amount.
• Balancing – Refund: Funds are refunded to your bank account, or in some cases directly by the tax agency.

Why a balancing payroll appears

Variances are a normal part of quarterly payroll reconciliation. Common reasons a balancing payroll produces a collection or refund include:

• A state unemployment rate changed mid-quarter, and payrolls processed before the change was applied require adjustment.
• A tax exemption was added or removed mid-quarter, requiring previously processed payrolls to be adjusted retroactively.
• Historical payrolls were entered with incorrect subject wages or tax amounts that need to be reconciled.
• Calculating taxes payroll-by-payroll versus in aggregate over the full quarter produces small rounding differences.
• Year-end agency requirements apply — for example, FUTA credit reduction states are announced each November and may result in Q4 variances for affected employers.

When money moves

Balancing payrolls are finalized at the start of the month following each quarter. After finalization, approximately 6 business days pass before any money moves.

• Collections are typically debited from your bank account between the 8th and 9th business day of the month.
• Refunds processed through 7shifts Payroll follow the same schedule.
• Refunds issued directly by a tax agency may take longer, depending on the agency.

How to view balancing payroll details

You can verify the breakdown of your quarter-end tax details directly within your account. 

1. Log in to the 7shifts web app as an Admin.
2. In the left navigation bar, select Payroll.
3. In your Payroll History, click the ⋮ (three-dot menu) next to the balancing payroll entry.

Three download options are available:

• Tax Receipt (PDF): A tax-by-tax breakdown of what is being collected or refunded and why.
• Payroll summary (CSV): A summary export for the quarter the balancing payroll covers. For example, a Q1 balancing payroll downloads the Q1 payroll summary.
• Payroll journal (CSV): A detailed journal for the same quarter timeframe.

How balancing payrolls affect employees

Most balancing variances are settled at the business level and don't affect individual employees. In some cases, employee-paid taxes may be adjusted — for example, if a PFML contribution was withheld during the quarter and a private-plan exemption was later added. When an employee's net pay is affected, the adjustment is reconciled in one of two ways:

• Reconciled on the employee's next regular pay run as a reimbursement or post-tax deduction.
• Handled manually by the employer on a separate payroll, depending on the situation.

Next steps

If a balancing payroll results in an unexpected collection or refund, review the Tax Receipt PDF in your Payroll History for a line-by-line breakdown. If the variance is unclear after reviewing the Tax Receipt, contact 7shifts Support for assistance.

Related articles