As the end of the year approaches, it’s time to get your payroll in order! A year-end payroll checklist can help you wrap up the year smoothly, avoid mistakes, and start the new year on a strong footing. Here’s your guide to finishing the year without a hitch.

 1. Verify Employee Information

Make sure all employee records are up-to-date. Double-check names, addresses, Social Security numbers, and tax withholding information. This helps avoid errors on W-2s and ensures employees get their year-end documents without delays.

 2. Check Payroll Tax Payments

Confirm that all payroll taxes have been paid accurately throughout the year. This includes federal income tax, Social Security, Medicare, and any state or local taxes. Catching errors now can help you avoid fines or late fees.

 3. Review Employee Benefits and Deductions

If you offer benefits like retirement plans, health insurance, or HSA contributions, verify that all deductions are correct. Year-end is a good time to reconcile benefits to make sure contributions match what’s been reported.

 4. Prepare for W-2s and 1099s

Make sure you’re ready to distribute W-2 forms to employees and 1099s to independent contractors by the January 31 deadline. Reviewing and finalizing payroll now means fewer headaches when it’s time to file.

 5. Evaluate Year-End Bonuses

If you’re offering year-end bonuses, make sure to include them in December payroll and withhold the appropriate taxes. Double-check any special tax considerations or bonuses to avoid surprises.

 6. Run a Year-End Payroll Report

Most payroll software lets you run a year-end report summarizing wages, taxes, and deductions for each employee. This report can help you review any inconsistencies and make corrections before finalizing the year.

 7. Review Your Compliance Changes for the New Year

The new year often brings changes to payroll regulations, minimum wage laws, and tax rates. Take some time to update your payroll software and review any compliance requirements for the upcoming year.

 8. Archive Records and Back Up Data

Finally, archive all payroll records from the year and back up your data securely. Keeping accurate records protects your business in the case of an audit and ensures you meet legal requirements.

Completing your year-end payroll checklist means a fresh start in January and keeps your business compliant. Following these steps will help you start the new year off right and stay prepared for tax season!