Payroll month-on-month variance report

What the payroll month-on-month variance report does

Payroll errors usually show up as a figure that moved when it should not have. List each payroll line for last month and this month, and the workbook shows the change in shillings and percent and flags any line that moved by more than the limit you set, so a typo or a missed change is caught before payment.

Who it is for

Payroll officers and finance managers who review payroll before approving it, and auditors checking that month-end payroll is reasonable.

How to use the workbook

1. Type the percentage change above which you want a line flagged.
2. Enter each payroll line for last month and for this month.
3. Read the change, the percentage change and the flag for each line.
4. Investigate every flagged line and note what you found before you approve payroll.
5. Save a copy under a new name for each month or year, so earlier records stay as they were.

What is inside

• Change in shillings and in percent for every line
• Flag for changes above your limit
• Count of flagged lines at the top
• Lines for pay, allowances and every statutory deduction
• Summary of OK and flagged lines with a chart

The workbook has these sheets: Instructions, Variance, Summary. The main table has the columns Payroll line; Last month; This month; Change; Change %; Flag. Yellow cells are for you to fill in and grey cells calculate by themselves, so leave the grey cells alone. The example rows show how it works; type over them with your own entries.

Tips for getting it right

• Review before payment, not after, when a correction is still easy.
• A flag is not an error; it is a prompt to ask why the figure moved.
• Keep the signed report with the payroll for the month.
• Lower the limit for lines that should hardly ever change, such as NSSF.

Why keep this record

Staff records go wrong in small, repeated ways: a figure typed twice, a deadline forgotten, a promise that nobody wrote down. A tidy workbook that everyone uses the same way removes most of those problems. It also gives you something to show an employee, an auditor or a labour officer when a question comes up months later, and it makes the next payroll quicker because the facts are already in one place.

Questions people ask

Do I need to know Excel formulas? No. Type into the yellow cells and the rest is worked out for you. The formulas are visible if you want to see how a figure is reached.

Can I add rows or change the layout? You can add your own columns to the right and your own notes. If you insert rows inside a table, copy the grey formula cells down so the new rows calculate too.

Will it work on my phone or in Google Sheets? Yes for viewing and typing, but dropdown lists and the charts look best in desktop Excel or LibreOffice.

Keeping it safe and up to date

Payroll records are personal data and tax records at once, so keep the file somewhere only the people who need it can open, and keep each month's copy for at least five years. Statutory rates such as NSSF limits and the Housing Levy change, so check the Rates sheet against the official source before you rely on a figure.

Read how to run payroll for a small business for the wider picture. Free calculators that go with it: Paye calculator, Payslip generator. See more payroll templates or ask us for a custom one.

The workbook works in Microsoft Excel, LibreOffice and Google Sheets. It is a tool to help you work out and record figures, not tax, legal or accounting advice, and it is not affiliated with the Kenya Revenue Authority. If something does not work as described, contact us and we will put it right.

Related guides, calculators and templates

• Free calculator: PAYE Calculator
• Free calculator: Payslip Generator
• Guide: Tax for Kenyans working remotely for foreign employers
• Guide: Per diem and staff meals exemptions raised: what employers should know
• Guide: Penalty and interest rates for late tax returns and payments: the current table
• Another template: Monthly payroll workbook (up to 50 employees)
• Another template: Payslip generator
• Another template: Annual PAYE and payroll summary

Need something different? Request a custom template, browse all guides or see every Excel template.