Year-end can be a very stressful time of the year for Payroll Professionals, so being organized with folders dedicated to your year-end and having a checklist can help tremendously! I would always recommend checking with your payroll provider first, as they may have year-end checklists available that align with your organization’s needs. If you do not have a payroll provider, a customized check list can be created for the needs of your specific payroll program and accounting requirements, as each organization’s year-end requirements vary. It is important to understand the clear process and payroll deadlines of your organization. I also recommend holding a meeting with key stakeholders (HR, Finance, and IT), as this can help to ensure all business functions understand the process clearly. Below are some tips to consider when preparing your payroll for year-end.
Most payroll companies, like Ceridian and ADP, have year-end training sessions; these are directly related to your payroll system and can guide you through the process from start to finish. They normally start sending out reminders around mid-October, if not earlier. I would highly recommend taking these courses. These payroll providers also provide their own checklist with dates that specific tasks need to be completed by. Additionally, if you are a member of The National Payroll Institute, they provide education and checklists for year-end.
Verify Employee Data (SIN numbers, wages, addresses, province of employment, etc.)
Ensure you double check that all your employee wages have been reported accurately and the province of employment is correct. A few months before year-end, I found that it is very helpful to have all your employees check their own information on their self-service accounts to ensure it is up to date. Many organizations have internet-based payroll programs and employees can check and verify any discrepancies at any time of the year.
Review Payroll Set-Up
Ensure you review and verify that all earnings, deductions, and taxable benefits have been programmed accurately. Your payroll system will provide reports to verify tax form boxes; these reports can be reviewed to verify all earning, taxable benefits, pension, etc. are aligned with the correct T4 boxes.
Checking EI and CPP discrepancies, this is a big one!
With robust payroll programs like Dayforce and ADP, you can run various reports after each payroll is submitted to identify any EI and CPP discrepancies. This gives you an opportunity to collect any monies owing and correct any issues before the end of the year. Always check the reporting options that your current payroll provider offers and reach out to your support hotline on how to streamline this task.
Reconcile Taxable Benefits
Ensure taxable benefits are recorded each pay period and that adjustments are made accordingly (e.g., company automobile benefits). Reconcile all your taxable benefits to ensure accuracy and be sure they are being recorded in the correct boxes on the tax slips.
Calculate any pension adjustments and validate any pensionable earnings per company plan documents. Remember to report the RPP number in Box 50 of the T4 slips.
Review and reconcile your WSIB/WCB/WorkSafe and Employer Health Tax.
Review and Submit T4s
Again, most payroll programs now allow you to review T4s well in advance of year-end, so take advantage of this, as it can reduce stress during crunch time! As already noted, your payroll system will provide reports to verify the tax form boxes. In Canada, T4s need to be available to your employees by Feb. 28th.
Important Direct Deposit Dates During the Christmas Season
As the year ends, ensure your commit dates have not changed due to bank closures over the holidays. You can reach out to your support hotline, and they can assist you to verify or adjust your commit dates. Most payroll programs have a printable calendar that gives you a clear overview of when your payroll needs to be submitted over the holiday season. Also, if you have a support hotline, you can always utilize them to help you confirm your submit dates.
Setup for the New Payroll Year
Confirm your payroll submit dates for the following year and review your payroll calendar within the payroll system.
Carry forward any relevant balances, such as vacation accruals, banked overtime hours, unused sick days, garnishments, or outstanding loan payments.
If an employee’s tax situation has changed, remind them to fill out new TD1; I recommend send a memo out to the organization to help remind employees.
Most payroll systems automatically update the CPP and EI rates, but if you need to do this manually, do not forget to update them in your payroll system and communicate it to key stakeholders within the organization.
Preparation is the key to a successful year-end; I hope some of these tips and tricks help make your year-end less stressful. In my experience, I find that being proactive throughout the year is a great benefit and does not leave you overwhelmed at year-end. Please be sure to reach out to Salopek if we can assist you in any way to improve your year-end processes and procedures! We have certified Payroll Specialists on our team that can offer year-end payroll support, guidance and ensure that your payroll is completed properly. Contact us for support with your payroll needs!
Article written by Salopek’s Payroll Specialist- Stefanie Busato