3 Tips for Less Stressful Year End Payroll Processing

In December 12, 2018

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It is that time of year again. The temperatures drop, the hustle-bustle of the holiday season is among us, and payroll is working hard to ensure all of their ducks are in a row before the end of the year. Unfortunately, many errors take place in payroll when common mistakes are overlooked during this busy season. Below are a few tips to help you keep those errors to a minimum by staying ahead of the game during year-end payroll processing.

Begin Preparing for ACA Annual Reporting

Did you have 50 or more full-time employees in the previous calendar year? What type of insurance (self- or fully-insured) did you offer? The number of employees and type of coverage you offer determine which forms you need to use to report.

Less than 50 employees with no insurance: No reporting required.

Less than 50 employees who were fully insured: Insurer is responsible for filing on your behalf.
Less than 50 employees who were self-insured: Complete and file forms 1095-B and 1094-B.
50 or more employees – Complete and file forms 1095-C and 1094-C.

Begin Processing All Year-End W-2 Adjustments

It is important you verify all non-cash and cash income has been recorded and taxed properly before the end of your 2018 payroll period. Do this to ensure that all W-2 forms and the quarterly 941 tax return are fielded with accuracy. Common adjustments include:

Third-party sick pay.
Group-term life insurance that exceeds $50,000.
Personal use of company vehicles.
Non-qualified moving expense reimbursements.
Company provided parking or transportation.

Non-cash payments.

Process All Checks – Manual and Voided

Any checks to employees issued outside of your regular payroll process need to be recorded and tax liabilities must be paid in accordance with applicable due dates. Ensure all “manual checks” issued during the year are accounted for as well as updated within the system. Do the same with all voided checks.