By: Patti Callaway

As we approach the end of the year, organizations are gearing up for the inevitable – year-end payroll. This crucial aspect of operations demands meticulous attention for a smooth transition into the new year. Here are payroll tasks to prepare for the new year.

Seven Payroll Tasks For Year-End Payroll

1. Review and Update Employee Information: Begin the year-end payroll process by thoroughly reviewing and updating employee information. Make sure that all personal details, such as addresses, tax withholdings, and benefit contributions, are accurate and up to date. This step lays the foundation for accurate W-2 and 1099 forms.
2. Verify Compliance with Tax Regulations: Tax regulations are dynamic, and it’s crucial for organizations to stay compliant. Take the time to verify that your payroll system aligns with the latest tax regulations. This includes understanding changes in tax rates, deductions, and exemptions that might impact your employees and your business.
3. Prepare for W-2 and 1099 Reporting: Prepare for the issuance of W-2 forms for employees and 1099 forms for contractors. Ensure that you have the necessary information for both employees and contractors, including any special circumstances or changes that occurred during the year.
4. Evaluate Overtime and Bonuses: Review the overtime and bonus payments made throughout the year. Make sure that these are accurately recorded and that any associated taxes are appropriately withheld. This step helps in avoiding discrepancies and ensures that employees receive the correct compensation.
5. Assess Employee Benefits and Deductions: Evaluate employee benefits and deductions to guarantee accurate year-end reporting. This includes contributions to retirement plans, health savings accounts, and any other fringe benefits provided. Accurate documentation is crucial for both your employees and your organization’s financial records.
6. Plan for the Next Year: Year-end payroll is also an opportune time to plan for the upcoming year. Consider any changes to employee salaries, benefits, or payroll processes. If adjustments are needed, plan for their implementation in the new year, and communicate these changes transparently with your workforce.
7. Seek Professional Guidance: For small to mid-size organizations, navigating year-end payroll complexities can be challenging. Consider seeking professional guidance. Whether it’s verifying compliance with tax regulations or improving your payroll processes, leveraging an advisor can save you time, resources, and potential headaches down the road.

 
In the world of payroll, preparation is the key to a successful year-end transition. If you have any questions or need personalized assistance, contact us – we’re here to support your organization’s payroll success.