7 Steps To Prepare for Payroll Year End

7 Steps To Prepare for 2022 Payroll Year End

Year-End is approaching, and though it’s hard to believe, 2023 will be here before we know it. Payroll professionals have much to do to prepare for this important milestone.

We’ve provided a few tips, tricks, and reminders as you prepare for year-end.

Step 1 - Review workers’ wages and benefits

Check each employee’s wage and benefit information to ensure you can account for all the benefits you paid them throughout the year—especially leading up to their final paycheck. If any benefits are not accounted for, they should be added to their last paycheck for 2022. Keep in mind that it is beneficial to review employee information throughout the year and to ensure that you are not paying ghost employees.

Step 2: Review employees’ and contractors’ personal information

Make sure you have the correct names, addresses, and Social Security Numbers for every employee and contractor you paid in 2022. For independent contractors, you will also need to check that their Tax Identification Numbers are correct and ensure payments are recorded for any bills that need to be included on Form 1099-MISC.

Step 3: Update employee tax profiles for 2022

Remind employees to review their withholding allowances for federal and state income taxes. Have them complete a new Form W-4 (or state equivalent) by January 1, 2023, if their personal information or allowances have changed.

Remember that allowances may have changed if the employee has experienced a change in marital status or if there has been an addition or subtraction in household size. Do not forget: W-2s must also be sent to any employees you paid in 2022, even those who are no longer working for you.

Step 4: Bring everything together with reconciliation  

If you pay your employees by check, perform a payroll bank reconciliation through December 31, 2022. This reconciliation should include identifying outstanding checks and comparing state and federal payroll tax withdrawals from your bank account to the amounts on your tax liability records.

Step 5: Make sure your employer information is up-to-date 

Check your business’s legal name, address, and Employer Identification Number to ensure they are correct.

Step 6: Confirm your tax profile for 2023 

Deposit requirements can change each year, so make sure you have the correct deposit information, as this information comes directly to employers from state and federal tax agencies.

Step 7: Verify employer tax rates for 2023 

Check your tax rates for state unemployment and disability insurance. If you have received a letter from any government agency with a new tax rate, forward the information to your payroll provider.

7 Steps To Prepare for 2022 Payroll Year Endhttps://www.cbiz.com/Portals/0/Images/CBIZ_HCM_article_payroll_yearend-1.png?ver=tNoNCsPdl8wOpyxRdzlKRA%3d%3dhttps://www.cbiz.com/Portals/0/Images/CBIZ_HCM_payroll-ye.png?ver=v0PojPnbqLQKY0h7jE0r1g%3d%3dYear-End is approaching we’ve provided a few tips, tricks, and reminders as you prepare for payroll year-end.2022-10-12T16:00:00-05:00Year-End is approaching we’ve provided a few tips, tricks, and reminders as you prepare for payroll year-end.Employee ManagementPayroll ServicesNo