Year-End Payroll: What You Need to Know

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Year-End Payroll: What You Need to Know

Written by Jon Wetherill, Horizon Payroll Services

Whether this is your first year end as an employer or you’re a seasoned veteran, there are always things you need to know to make your transition into a new year as smooth as possible. By taking some time to account for certain things now, will save you considerable time in the future. Below is a list that should help you whether you do your payroll in house or outsource to a payroll provider.

Check for Checks

Did your company have any checks it issued that need to be accounted for? For example, where there any hand written checks to employees that need to processed for tax purposes and record keeping? Also, any voided checks should be reported, along with any unclaimed checks by previous employees that need to be returned and adjusted to the payroll records. Try to think back, and ask yourself if there were any unusual check transactions that occurred throughout the year that need to be included in your records. Trying to account for these after year end will cause considerable headaches.

Make sure you Compensate

Are there any wages or benefits for which you need to compensate your employees? Do you have any bonuses that need to be paid? Are there any tips allocations? Are there any taxable fringe benefits that need to be claimed? Make sure you think to include any vacation or paid time off income that needs to be paid. Try to remember to include all items related to money and you’ll save yourself time.

Remember Deductions

Do any of your employees have deductions? If so, do any adjustments need to be made to these? Any new deduction amounts need to be reported for the new year such as health, dental, and vision deductions. Also, any group term life adjustments should be noted. Along these lines, ask yourself if there are any employees that want to max out there retirement contributions, such as 401k or IRA. After first considering any monies that need to be paid, your next step should always be to consider the deductions.

Double check for W2s

The last thing to be considered should be to double check all employee information to make sure W2’s will be accurate when issued. Make sure the information in your records has the correct name, address, Social Security Number, etc. Also, the above paragraphs will also impact the information reported on the W2’s, so this is another reason to make sure it’s correct. Having to correct, adjust and reprint W2’s is not only time consuming but can also be costly. So, double check your information before, to keep from having to reprint after. If you follow the simple advice above you’ll find that your year end for your payroll will smoothly and seamlessly transition into the new year. Year end is always a busy time no matter what business you’re in, and time is always tight. But, if you take the time now to make sure everything is correct and accounted for, you will save much more time than having it to do later. You’ll make sure your start to the new year is a happy one!

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