The payroll year end process is serious business. It’s a task that requires time, knowledge, and a lot of patience in order to accurately calculate taxes, compensation, and deductions to be withheld. Not surprisingly, it can get a little stressful. Luckily, we’ve put together a handy guide to ensure that your company’s year end payroll process is as smooth and stress-free as possible.
It can be tempting to just dive right in, but stopping to create a strategy for tackling the payroll year end process will end up saving you even more time. You can do this by prioritizing and ranking all of your major payroll activities by risk factor. Consider assigning targets and completion dates for each activity, and then assign tasks accordingly. Remember, a well-documented and organized approach to payroll helps to keep everyone on the same page and ensures greater efficiency overall.
With your strategy set, it’s time to move onto the planning stage and planning is always easier with a checklist. To start, create a detailed list of all the important documents you need. If you don’t have a previous year’s list to reference, head to the CRA’s website to download the relevant employer’s guides and tax forms. Recommended forms include:
Even if you’ve been doing payroll for years, that doesn’t mean you can complete the payroll year end process on autopilot. Federal policies are constantly changing, so it’s important to stay informed about any news related to payroll and benefits, such as changes to T4 slip deliveries, or new rates for CPP and EI premiums. Be sure to review the most up-to-date versions of employer’s guides for changes affecting year end filing, as well as any changes effective in the new year.
It can also help to put together a one-pager for your employees, summarizing all of the important changes. Bringing employees into the loop will help them plan for any changes to their pay based on the new values and can serve as a helpful reminder to complete new TD1s (federal and provincial) if their situation has changed.
No one likes getting a last-minute email sent just days before filing deadlines, so instead of chasing down department heads, consider holding a formal year end meeting. Set a time well in advance of your deadline and then invite HR, Finance, and any other relevant departments to go over what information you will need. Then, assign clear expectations, deliverables, and deadlines to keep all those involved accountable. From there, keep the communication flowing to ensure that no one goes off track and adjustments can be made before it’s too late.
To make the payroll year end process as smooth as possible, take the time to review these important details:
Part of closing the year in payroll is beginning the process of generating T4 tax forms for your employees. Through Knit’s payroll, you can generate and submit T4s through the platform as of the first week of 2019.
Once all your T4 slips are done, you will need to process your T4SUM summary form, which reports the sum total of the amounts reported—a step that Knit automates for you.
After you’ve balanced your books and completed your year end, it can be tempting to kick back and relax. However, you can save “future-you” some time by completing a post-year end evaluation and identifying action items for next year. This can include any helpful notes or productive habits you can implement, and a review of your payroll calendar for potential payroll processing conflicts.
If you’re overwhelmed by year end payroll, don’t worry because you’re not in this alone! Payroll service providers such as Knit are up-to-date on all the latest regulatory changes and can help to assist you with any administrative issues you may encounter.