When you hear the term “year-end,” what’s your first reaction?
If you’re like most employers, the consensus is the same. Year-end incites panic, uncertainty and desperation across many organizations. And for many finance departments, it’s the most stressful and chaotic time of the year.
But take a breath, the end is near. With the right plan and processes in place, you, too, can curb anxiety and close out the year on a high note. Here are some things to keep in mind prior to your last payroll to help create a successful and accurate end to 2017.
Review your payroll data Are your payroll records accurate? Pay close attention to your payroll data to confirm personal information and wage and benefit data is accurate for both active and terminated employees.
Verify employee information If Form W-2s are missing critical employee details, it could cost you. The Internal Revenue Service (IRS) can impose a penalty for each Form W-2 with a missing or incorrect Social Security number or employee name, so it’s imperative that employers review their payroll data to ensure employee names, addresses and Social Security numbers are accurate and entered in the correct format.
Verify employee benefit information First, analyze employee benefit selections to ensure that deferred compensation plan types and employee contribution amounts are correct. Then, ensure that other special tax forms and special items have been updated and submitted, such as:
- Other compensation
- Third-party sick pay
- Employee business expense reimbursements
- Taxable fringe benefits
- Tip allocation information
- Dependent care benefits
And if you’ve provided fringe benefits to employees, ensure that you’ve properly withheld taxes on any taxable benefits your employees have received throughout the year, including:
- Personal use of a company vehicle
- Non qualified moving expense reimbursements
- Company-provided transportation or parking
- Employer-paid education not related to the employee’s job
- Non-accountable business expense reimbursements or allowances
- Non-cash payments
Check for special procedures
- Schedule any special bonus payrolls for the current year
- Instruct employees to complete a new Form W-4 if their situation has changed or if they filed exempt during the previous year
- Confirm that all manual checks written throughout the year have been accounted for and updated in the system
- Determine that all voided or reversed paychecks have been accounted for in the system
If year-end is leaving you stressed and causing uncertainty, Paycor can help. Each year, we create a comprehensive year-end payroll guide and tutorial videos to prepare our clients and ensure they’re not overwhelmed with the requirements. We’d love to schedule time to learn the challenges you’re facing and how we can help make a difference at your organization. Click here to start a conversation.