End-of-Year Payroll Tax Checklist: Are You Ready?


As you’re preparing for year-end payroll tax duties, it’s important to keep in mind the new year tasks involved as well! TIP: If you use Celero’s full-service payroll, you’ll only need to focus on distributing W-2s to your employees — we handle the rest of your tax filing!

Keep yourself organized with the checklist below and be sure to finalize the required payroll tax tasks on time. We have provided a downloadable and printable End-of-Year Payroll Checklist for free!

Before Year-End

If you haven’t completed the following year-end payroll tasks, we suggest you reach out to a Certified Public Accountant (CPA) to determine the best way to abide by all tax laws and regulations. You want to avoid facing costly IRS penalties by incorrectly handling your payroll and employment taxes. If you find that you struggle with taxes, outsourcing payroll is a reliable option that could work for you.

Confirm identifying information for all employees.

Legal names

Social Security numbers

Current addresses of residence

Make sure all paychecks from the year are correctly recorded. Include:

Commissions, bonus pay or anything run outside of the normal payroll

Handwritten checks

Voided paychecks

Verify employee wages, benefits and deductions.

Look up remaining sick days, vacation time and other permitted time off for each employee.

Based on your policies, find out if employees want to roll over the time to next year or cash it out. If you have a use-it-or-lose-it policy, notify employees of how much  time they have left and when they need to use it by.

Order Form W-2 and Form W-3 from the IRS or another authorized provider.

Get updated labor law posters to hang up next year. You must meet both federal and state labor law posting requirements.

Check your tax rates for federal, state and local taxes.

Federal income tax

Federal unemployment tax (FUTA tax)

Social Security tax

Medicare tax

State income tax

State unemployment tax (SUTA tax)

Local income tax

Have employees review their withholding allowances for federal and state income tax withholdings.

Employees indicate federal withholding allowances on Form W-4.

Employees might also need a state withholding allowances form.

Determine next year’s deposit schedule for federal income tax and FICA taxes. You must pay these taxes on a monthly or semiweekly basis. Your deposit schedule is based on a lookback period.

After Year-End

Don’t forget those New Year tax responsibilities as well! You want to be sure that as you complete everything for year-end, you keep in mind what needs to be done for the beginning of the year as well. Keeping yourself aware of what needs to be accomplished in the future is a sure way to help you stay prepared! Remember, you don’t want to face the risk of costly IRS penalties.

Update new wage rates, withholding allowances and other deductions.

Give a Form W-2 to each employee by January 31.

File Forms W-2 and W-3 with federal, state and local governments by January 31.

For the federal government, file with the Social Security Administration.

For states or localities with income taxes, file with the appropriate state and local governments.

Some employment taxes from the previous year are filed in the new year.

File FUTA taxes on Form 940 by January 31. Fourth quarter FUTA taxes are also due by January 31.

File federal income taxes and FICA taxes by January 31. Most employers will use Form 941, but some employers can use Form 944