Dear Nikhil,
In accounting reconciliation means to verify the transactions. (e.g verifying the transactions with budget provision, actual expense occurred and the receipt of transactions.)
Same is the case with Payroll transaction, which means verifying the salary expenses of the company. like If an employee earned Rs. 8000/- during a payroll period (Normally a month) but only receives Rs. 7550, the rest of the money would go to such things as taxes, Social Security with-holdings and insurance etc deductions. Now reconciling the salary cheque would involve all the above mentioned accounts affected by the payroll.
Regards,
Ali Baloch