Payroll year end is a sequence with deadlines rather than a single event, and it is the month that reveals whether the product and the process were a good choice. Most of the pain is avoidable and comes from reconciliation left until the end rather than performed through the year.
The sequence
Complete the final pay period of the year, send the final submission with the year end indicator, produce employee end of year statements, update payroll records for the new year including tax codes, and check that the new year's rates and thresholds have been applied. Each step has its own date and the dates do not move for anybody's convenience.
Reconcile through the year, not at the end
Monthly agreement between what the payroll reported and what was paid over is what makes year end quiet. Where that has not happened, the difference has to be found across twelve periods at the busiest possible moment. This single habit separates employers who find year end routine from those who dread it.
Expenses, benefits and the tail
Benefits provided to employees have their own reporting and deadlines that sit slightly after the main year end, and they are commonly forgotten because they are handled by a different person. Put them in the same calendar, and confirm whether any are being payrolled rather than reported separately.
Questions people ask about payroll year end
What if we find an error after the final submission?
Corrections can be made and the method depends on when the error is found. Do it promptly, because the process is more straightforward earlier.
Do employees need a paper statement?
Electronic is normally acceptable provided people can access it. Confirm how your product distributes them and that leavers are covered.
When do new rates apply?
From the start of the new tax year, and the product should apply them automatically. Check it has rather than assume.