Payroll: Preparing for Year-End

Published January 7, 2020 Written By Jill Pinon, Payroll Architect

Payroll: Preparing for Year-End

By Jill Pinon


In the world of payroll, it’s all about deadlines. As soon as you close, settle, and reconcile one payroll, you start moving onto the next one. There is little downtime and before you know it’s the end of the quarter, or even worse …year-end.


No one wants to think of year-end, but then it creeps up on you and hopefully you are ready.

It is never too early to start preparing. There are configuration and reconciliation that can be done ahead of time to ease the stress at year-end. 


A year-end checklist is an essential tool that will allow you to be prepared and efficient for year-end. The following items and reports are critical tools to assist with identifying errors, balancing, and reconciling your data in preparation for W-2 processing.


  • Review IRS reporting requirements for any W-2 updates  
  • Update W-2 Box Configuration (if needed) via the Maintain W-2 Box Configuration task
  • Complete all payrolls for the reporting year, including all off-cycle adjustments, including prior quarter adjustments
  • View W2 Errors Report
    • Correct any invalid data, including missing SSN’s, YTD negative amounts, etc.
    • Once errors are fixed, continue running the report until no items appear
  • Company W-2 Audit Report 
    • Verify that values are mapped to W-2 boxes and box totals are accurate
    • Balance W-2 totals by Company to current completed payroll results
  • Audit-Negative Wages or Tax (by worker) Report
    • Identifies employees with negative quarter or year to date wages or taxes, which need to be resolved before year-end
  • W-2 Preview Report
    • Can be run for individual workers or for all employees to verify worker data for all W-2 boxes
  • Tax Filing Quarterly Data by Company Report
    • This report can help to balance against the Company W-2 Audit Report
  • Tax Filing Quarterly Data for Workers Report
    • Can be run for individual workers or for all employees to assist with worker errors identified on the View W2 Errors or Audit-Negative Wages or Tax (by worker) Reports


Other items to consider are: 

  • Ensuring employee and employer portions of Social Security and Medicare Taxes and Taxable Wages are in sync 
  • Ensuring employees have not exceeded the IRS annual limits for 401k, FSA Health, FSA Dependent Care, etc.


These reports can be run at any time, for any range of dates. Ideally, you should incorporate these items into your quarter-end processing. This will help identify issues or out of balance items, which can be fixed ahead of time and take off some of the burdens at year-end.


Once all errors have been resolved and data has been reconciled, you are ready to send and file your Q4 and YTD tax information and prepare for printing W-2s.

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