The end of the year is drawing close, and so are your end-of-the-year payroll responsibilities. Instead of stressing about tying up loose ends, take a look at our year-end payroll checklist to make sure your proverbial ducks are in a row.
Double-Check Your Employee Data
Though payroll might be less fun than dressing up like Santa and giving out gifts, the end of the year is a good time to check your lists twice. Before processing your end-of-the-year payroll, confirm your employees’ existing data. This process includes looking at everything from their current addresses and phone numbers to potential retirement plans and the formatting for their social security information. Since open enrollment already or will soon conclude for your company, you have the perfect opportunity to keep on top of new developments.
An easy way to do this on a budget is by sending out a secure Google Form with all the pertinent information listed; after your employees fill this form out, you can transfer their answers from the resulting spreadsheet into your own payroll database.
Other information you’ll want to check up on includes the following:
- Employees’ Affordable Care Act (ACA) reporting
- Form W-2/W-4 accuracy and formatting
- Additional tax forms for qualifying employees (for example, extra Medicare forms for those earning $200,000 or more)
- Minimum wage compliance and 2017 payroll tax rates and thresholds
It’s also not a bad idea to corroborate your existing tax forms with your employees’ forms from the year before, especially since doing so is a great way to ensure your formatting matches up.
EOY Special Procedures
Naturally, your business is likely to have one or two deviations from standard year-end protocol; you’ll want to make sure that you have both the forms and the processes for these deviations ironed out well before the last minute.
For example, if you intend to hand out end-of-the-year bonuses, provide your employees with the pertinent information in advance. You may also need to alter your forms accordingly, so try to have a sense of who’s getting what a few months before you need to file.
The same goes for end-of-the-year report scheduling, accounting for manual and voided checks, and ordering your office’s supplies for the rest of the current year (and the beginning of the coming one). Get your order requests in as early as possible, especially if you’re ordering your W-2s from a payroll provider. You don’t want to be high and dry come tax season!
In Summary: Your Year-End Payroll Checklist
☑ Verify demographic data (addresses, phone numbers, name changes, etc.) of all current and terminated employees along with any contractors.
☑ Confirm year-end payroll deadlines, holiday processing schedules, and dates to submit federal and state deposits.
☑ Prepare for Forms W-2, 1099, and, if applicable, 1095 for ACA compliance.
☑ Review and verify employee benefit eligibility and continuation, including health care, fringe benefits, PTO, life insurance, and retirement plans. Remind staff about unused Flexible Spending Accounts to avoid forfeiting their funds.
☑ Calculate and distribute employee bonus checks.
☑ Encourage employees to update W-4 forms for 2017.
☑ Issue final paychecks to staff, taking into account bonuses, overtime, holiday pay through December 31. Calculate benefits such as car allowances or insurance costs for any year-end adjustments.
☑ Reduce the chance of having to file a W-2c or getting hit with a tax penalty by verifying employee names and social security numbers using the Social Security Administration’s (SSA) online Social Security Number Verification Service.
☑ Setup and prepare for 2017 with accurate payroll tax rates, updates wages, and compliance with any new Department of Labor (DOL) laws.
Note: Every item on this list may not apply to your specific business nor is this a complete list. Check with your payroll specialist should you have any questions or concerns.
Make the Switch Now:
The first of the year is the best time to switch payroll providers. We work with a variety of small business industries and have been helping clients implement successful, compliant payroll systems since 1999.
Abacus Payroll is here to help ease your transition from this year into the next—after all, you should be celebrating the end of a successful year, not fearing it! Give us a call today at (856) 667-6225 or email us for a no-obligation quote!