Payroll Year-End To Do's
Edited by Henry Tsung.
It's that time of the year to wrap up 2021 payroll duties. Here are a few reminders to help you close out your payroll for the year.
Late November/Early December:
Remind employees that if there has been a change in their filing status (e.g. due to marriage, divorce, or dependents), they may want to file a new W-4 and state tax form for 2022
Compare previous W-2 with gross wage report
Confirm that employee name, address, date of birth, and Social Security numbers are correct
Verify all employees are taxed in their correct state
Before your last payroll of 2021:
For tax purposes, checks or electronic payments of wages paid in 2022 are generally 2022 wages, even if earned in 2021
Check all Social Security tax withheld. If any employee exceeded the 2021 limit, make an adjustment or refund before making your final tax-year 2021 deposit
Verify that all special wage payment and adjustments are correctly posted to 2021 earnings before processing 2021 W-2s. These may include:
o Non-qualified relocation expense reimbursement
o Group term life insurance in excess of $50,000
o Third-party sick pay if the employer has responsibility
o Manual or voided paychecks not in the payroll system
o Personal use of company vehicles, parking and/or company-provided transportation
o Employer paid child care
o Company-paid educational assistance
o Bonuses
o Non-cash payments
After your last payroll of 2021, but before the first payroll of 2022:
Process W-4s submitted for 2022
Review discrepancies such as missing addresses, and missing Social Security numbers
Check for excess contributions to qualified plans, including 401(k), 403(b), especially for highly-compensated employees
Check accumulators – Make sure the year-to-date numbers are zeroed out
If you have any questions, please do not hesitate to reach out to Kiwi Partners' HR Services team.