The Essential Year-End Payroll and HR Checklist for 2024 

We all have our unique ways of dealing with stress, and I happen to be one of those people who find solace in making lists.

I even have a master “List of Lists.” There’s something oddly satisfying about crossing off completed tasks and freeing up valuable space in my mind.

When life gets overwhelming, my go-to solution is to start with a list. And this time of year, list-making becomes especially critical. I'm not just talking about the wish list for Santa; I mean a list for everything.

According to a CivicScience poll, nearly half (48%) of all adults admit feeling more anxious than usual during the holiday season. For payroll professionals, I’d guess that number is closer to 100%. Year-end deadlines, W2 prep, and last-minute changes don’t exactly scream “holiday cheer.”

It's about to get chaotic, and there's a lot to manage. So, let's create a Year-End Payroll and HR checklist together.  

Step 1. Review your Employee Records: Names, SSNs & Addresses 

W2 season is approaching, and while your employees probably won't start worrying about it until January, it’s better for them to start thinking about it now.

If any of your employees have recently undergone a name change or change in address, updating this information in your payroll system is crucial before W2 forms are generated.

Ideally, your payroll system has an option for electronic W2s, just in case.

This might seem minor, but incorrect or incomplete information can lead to delays, returned mail, and frustrated employees in January.

Equally important are Social Security Numbers (SSNs). If you haven’t confirmed that your SSNs are correct in your payroll software, take care of that ASAP! An error here can result in IRS penalties and cause unnecessary delays for your employees.

A quick audit of your payroll software now will save you a world of hassle later.

Step 2. Make Note of Additional Income to Report on W2s 

We’re human and sometimes we forget to record things properly.

Is there anything related to income you haven't recorded yet in your payroll system? It’s easy to miss things like:

• Manual checks issued throughout the year
• Cash gifts handed out at holiday parties
• Non-cash benefits, like the personal use of a company vehicle

Even if these seem insignificant, they must be accounted for when preparing W2 forms.

If you’re uncertain about what should be reported or whether any of these situations apply to your case, then get in touch with your payroll specialist for guidance!  

Step 3. Know Your Deadlines 

You may (and likely should) have a payroll company taking care of these things for you, but you should still have these dates marked on your calendar. Missing these deadlines isn't an option.

• By January 31, employers must provide Form W-2 to employees to file their federal and state taxes. A copy of each employee's W-2 must also be sent to the Social Security Administration (same deadline).
• Applicable large employers must furnish Form 1095-C to applicable employees by March 3, 2025. The deadline for filing paper Forms 1094-C and 1095-C with the IRS is February 28, 2025, or March 31, 2025, if filing electronically. 

Step 4. Review Your Compensation Plans 

You might already have established internal policies for assessing compensation as a part of performance reviews. However, if you don’t, this is an opportune moment to review your compensation plans to remain competitive in the upcoming year.  

There’s a significant emphasis on transparent and equitable pay practices. Remember, replacing an employee can cost up to 2 times their annual salary, underscoring the significance of retaining and rewarding your talent.

Don’t forget to check for any changes to state minimum wage laws that will take effect in 2025 and make adjustments as needed.

If you're contemplating year-end bonuses, collaborate with your payroll team to distribute these payments that align with your preferences. Some companies may prefer distributing paper checks during holiday parties, as opposed to direct deposits, so plan accordingly.  

Step 5. Update Your Handbook 

Your handbook is one of the most important tools you have for communicating with employees. It sets expectations, outlines company policies, and provides guidance on everything from behavior to benefits.

These guidelines naturally evolve over time, so they should undergo an annual review by the leadership team.  At the end of each year, review your handbook for updates, such as:

• Removing policies that are no longer relevant.
• Updating language to reflect changes in laws or company practices.
• Adding policies that address new workplace concerns.

Once you’ve finalized updates, make sure employees review and acknowledge the changes. This step is critical for avoiding misunderstandings down the road.

Updating your employee handbook is one of the most important steps in wrapping up your year-end HR tasks.

But if you’re unsure where to start—or want to make sure yours is comprehensive and effective—check out our Directions for Writing an Employee Handbook for practical tips and expert guidance to create a handbook that supports your team and protects your business.

Year-End Payroll Doesn’t Have to Be Overwhelming

Phew, it feels like a lot, doesn’t it?

If knowing is half the battle, then that means you’re already halfway done!

As you check off each item, the weight on your shoulders will lighten, leaving you more room to savor the joys of the season with your family and friends.  

We understand that even with the best intentions, things can get overwhelming.

Even with the best plans, though, year-end can be stressful. If you’re feeling overwhelmed or need help managing the complexities of payroll and HR, we’re here to help. Reach out, and let’s make your year-end process smoother and less stressful.