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.