Follow this handy checklist at the end of each year to assist you in closing out your organization’s payroll. CHR payroll clients will receive a year-end questionnaire to ensure W2s, bonuses, and other year-end transactions are processed accurately and efficiently.

Year End has two phases:

1. BEFORE your LAST PAYROLL of the calendar year
2. AFTER your LAST PAYROLL but BEFORE your FIRST PAYROLL of the NEW calendar year

BEFORE your LAST PAYROLL of the calendar year

In addition to your normal verification process:

1. Check employee and employer characteristic data:
   1. Verify employer and employer data used in processing your quarterly tax reports and W2s.
   2. Confirm employee names and SSN are in correct formats (IRS may impose penalties for W2 forms with a missing or incorrect name and/or social)
   3. Ensure all deceased employees are coded properly
2. Check wage, tax, and benefit data:
   1. Confirm deferred compensation plans type are accurate as well as contribution amounts
   2. Check GTL adjustments have been updated and submitted
   3. Ensure other special tax items have been updated and submitted (Third Party Sick Pay, fringe benefits)
   4. Verify employer state unemployment insurance rates and taxable wage limits for each state
3. Check for special procedures/processes:
   1. Schedule your bonus payrolls for the current year (fill out and send back YE Questionnaire)
   2. Request any special reports
   3. Remind employees to fill out any new W4 documents for updated situations
   4. Confirm all manual checks written during the year have been accounted for
   5. Determine all voided or reversed paychecks have been accounted for

AFTER your LAST PAYROLL, BEFORE the FIRST PAYROLL of NEW calendar year

Take these steps:

1. Check employer and employee characteristic data:
   1. Review discrepancies such as missing addresses, and missing or invalid SSNs
   2. Ensure terminated employees have zero balances for loans, garnishments, vacation, and sick time
2. Check wage, tax, and benefit data:
   1. Verify employers new State unemployment insurance rate and taxable wage limit
   2. Test tenability of SS/MEDI tax withholding (employee and employer)
   3. Compare payroll registers to W3 totals
   4. Compare W2 forms to State and local reports
   5. Compare total wages reported for each tax; reconcile if incorrect
   6. Does reported taxes from W3 equal tax deposits?
   7. Check contributions to cafeteria section125 plans
   8. Check for excess contributions to 401k, IRA and 403B plans
   9. Ensure that any employee tax and/or taxable blocks have been removed if not needed for upcoming year
   10. Verify deduction amounts for upcoming year have been applied
3. Check for special procedures
   1. Schedule any bonus payrolls
   2. Confirm new year schedule for payroll

Payroll services made easy

Tired of manual, time-consuming payroll processes and being On Hold with the big payroll processors to get your questions answered? Then it’s time to talk to CHR. We balance personalized support with best practice technology to ensure your payroll is always scalable, accurate, and efficient. And there’s always a dedicated payroll rep on-call to assist you. No call‐centers here. Contact us today.