Year-End Payroll Checklist: 7 Things to Do Before December 31

There’s a lot to wrap up at the end of the year: sales goals, client gifts, and holiday schedules all compete for attention. But if you run a business, year-end payroll needs to be on that list too because accurate payroll processing and tax reporting set the stage for a clean start in January.

TPC makes it easier, with this step-by-step checklist that ensures your records are clean, your payroll taxes are filed, and your employees get the documents they need.

1. Verify Employee Info

Confirm that the names, addresses, and Social Security numbers are accurate in your payroll system.  W-2 forms depend on this data being accurate; incorrect details can cause delays or IRS corrections.

2. Process Final Payrolls

Make sure all paychecks, including bonuses, commissions,  or holiday pay, are accounted for before the last payroll processing date of the year.

3. Review Year-to-Date Totals

Run reports to confirm total wages, taxes, deductions, and benefits. It’s easier to fix discrepancies now than to correct filings after year-end payroll has been processed.

4. Distribute W-2s and 1099s 

Begin preparing employee W-2 forms and contractor 1099 forms early.  Distribute forms early so employees and contractors can receive their documents well before the January deadline, while remaining compliant with State and Federal tax reporting requirements.

5. Double-Check Tax Payments

Verify that all quarterly tax filings and payments are up to date, covering federal, state, and local requirements.  Staying current reduces the risk of penalties and keeps your end-of-year tax records accurate.

6. Track PTO Balances and Carryovers

Stay informed about which time off carries over or needs to be paid out. Review unused PTO, carryover rules, and any outstanding balances to be paid out.  TPC’s time-tracking tools simplify this process.

7. Schedule a Year-End Review

Arrange a meeting with your payroll provider (that’s us!) to discuss any changes for 2026, such as benefits updates, planned process changes in the upcoming year, or new hires.

Don’t Let Year-End Creep Up on You

The sooner you prep your end-of-year payroll tasks, the smoother it goes. Let TPC help you close out the year with confidence, stay compliant, and be accurate, ready for a successful start to 2026!

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