It is that time of year again: payroll year end! For nine years, I’ve supported clients in implementing Human Capital Management (HCM) systems and developing HR and Payroll processes. During this time, I’ve encountered several common misconceptions about payroll year end. Let’s set the record straight about the top four misconceptions and prepare for a smooth payroll year-end.
ONE: “That’s Payroll’s Responsibility.”
This misconception often surprises me. Achieving peak performance in any business operation, including payroll, requires collaboration among various teams. Understanding each other’s roles is important, but identifying opportunities for collaboration is crucial. A study by the Institute for Corporate Productivity1 found that companies that encourage collaboration are more likely to be high performing by fivefold. If you haven’t assembled your year-end team, now is the time. This team can include representatives from HR, Benefits, Payroll, Accounting, and IT. Engaging all relevant stakeholders will enable you to create a comprehensive and effective plan.
TWO: “Don’t you just have to click a button?”
I wish it were that simple! Despite being called the “year-end process,” the tasks related to year-end filings begin long before the first payroll of the year and continue through each payroll cycle until the completion of all filings, amendments, and remittances.
These tasks include:
- Staying informed and compliant with federal, state, local, and internal regulations.
- Correctly coding and calculating employee data and pay, reconciling payroll data to W-2s and other filings.
- Clearly communicating changes, timelines, and expectations.
THREE: “It looks like I’ll have to work through the holiday/weekends/vacation again.”
This sentiment is still prevalent among industry professionals despite efforts to avoid working during planned time off. The American Psychological Association2 conducted a survey in 2023 that found only 40% of employees believed their employers appreciated the importance of time away from work. This attitude highlights the importance of leadership setting clear expectations. Working during planned time off should be reserved for emergencies only. Implementing a well-thought-out plan to prevent and manage emergencies is essential and will be your roadmap to decreasing the time working on holidays/weekend or planned vacation days.
FOUR: “Isn’t the main goal to have zero W-2 corrections and filing amendments?”
While striving for zero W-2 corrections and filing amendments is a worthy goal, it is not always achievable. Despite meticulous preparation and communication, issues may still arise. Federal and state regulations constantly evolve and cannot always be predicted. Receiving timely information from employees and stakeholders may be out of your control. It’s important to allocate time in your year-end process to make corrections. The main objective should always be to review lessons learned and continuously improve your knowledge, planning, and execution of your year-end responsibilities.
Address these misconceptions to better prepare for a smoother and more efficient Payroll Year-End process. Anticipate these issues to avoid an unpleasant experience for employees. In some cases, your company could be assessed hefty fines or late fees if you cannot meet the deadlines.
The good news is that you don’t have to go it alone. If you need additional assistance with your payroll year end, we have experienced subject matter experts who can help. Contact us to learn how we can help you prepare and execute your payroll year end.
- New Study Finds That Collaboration Drives Workplace Performance (forbes.com) ↩︎
- 2023 Work in America Survey: Workplaces as engines of psychological health and well-being (apa.org) ↩︎
About the Author
Jade Lucas has over nine years of WFM, Payroll and reporting experience. She has been a Payroll.org member since 2020, and is a Certified Payroll Professional (CPP) since 2022. She specializes in Payroll processes and compliance reviews.
Jade is also a budding homesteader. What started as a fun hobby with her husband has grown over the years as now, she cares for, learns from and enjoys ten different kinds of fruit trees, vegetables, plants and chickens. Beyond the more immediate, delicious benefits of this ‘hobby,’ Jade has found that what she loves the most is sharing the fruits of her labor with friends and family.
To learn more about Jade find her on LinkedIn