As 2023 nears an end, businesses prepare for year-end payroll processing to ensure a seamless transition into 2024. In this blog post, we provide an expertly crafted checklist to guide your payroll administrator through each step, and show how to achieve how to achieve flawless year-end payroll administration.
Download, print off, and review the Year-End checklist
1. Assessing Statutory Holiday Impact
Start by understanding how statutory holidays will impact payroll processing dates. Adjust your schedule accordingly to prevent payment issues on these important dates. Check out the national payroll association to stay updated with all important payroll dates and guidelines.
2. November 1: Document Deep Dive
Launch your year-end journey by reviewing all relevant documentation starting November 1. By starting early, this initiative gives ample time for correcting any discrepancies or missing details.
3. Mid-November: Set Payroll Run Schedules
Have your payroll clerk establish a payroll run schedule for the upcoming year as soon as mid-November. This will ensure consistency and prevent disruptions during this crucial transition period.
4. Continued Checks: Preliminary Payroll Reports
Between November and year-end, conduct regular audits on preliminary payroll reports after each pay run to detect errors and inconsistencies. This prevents future errors and irregularities from occurring.
5. Verifying Employee Information: Confirm Employee Info.
Maintain accurate employee data by reviewing Social Insurance Numbers (SINs) and mailing addresses of employees. This step helps prevent delays in payroll processing.
6. Solutions for Shortages in CPP/QPP and EI
Contact the appropriate organizations as soon as you identify Canadian Pension Plan/Quebec Pension Plan (CPP/QPP) or Employment Insurance (EI) shortfalls; this is especially critical if an employee turns 18 or 70 during the calendar year.
7. November's End: Pay Element Precision
At the end of November, carefully review and confirm that all payroll year-end boxes represent required information for tax reporting. Doing this will ensure accuracy for each box assignment.
8. T4 and T4A Preparation
Prior to running the last run for this year, ensure T4 Box 45 and/or T4A Box 105 include coverage codes as per reporting requirements for the Canadian Dental Care Plan (CDCP). This step is key for meeting regulatory reporting obligations for CDCP reporting.
9. Benefits and Payments Perfection
Before the final run of the year, enter all taxable benefits affecting statutory deduction calculations. Also, record any manual or reverse payments to ensure no discrepancies arise in accounting records. For further guidance check out the payroll deductions online calculator.
10. Terminated Employees in Focus
Make sure all terminated employees are included in year-end reports by activating Employee Self Service (ESS) accounts for former workers; doing so streamlines tax form access and can reduce post-year-end requests for information.
By following our 10-step checklist, businesses can ensure accuracy, compliance, and a smooth transition into the New Year.
FAQs on Year-End Payroll:
Q1: Will my new payroll system allow me to complete year-end processing?
Yes, but make sure that any terminated employees are also included, and box assignments are reviewed early on.
Q2: Why is activating the ESS accounts of terminated employees important?
Employee Self Service Access (ESS Access) allows former employees to easily retrieve tax forms for filing, which reduces post-year-end requests.
Q3: If I miss an official holiday in my payroll schedule, what will happen?
Please adjust payroll processing dates accordingly as payments cannot be dated on official holidays.
Q4: May I file tax forms before making year-to-date adjustments?
It's crucial to enter year-to-date adjustments before authorizing tax forms for accurate reporting.
Q5: How does BAASS assist businesses during year-end processing?
BAASS provides comprehensive year-end payroll support, customized reporting capabilities, and expert assistance for an easy year-end process. You can book a 15 min. free payroll assessment call.