Preparing for Year-end 2021

Jim Kohl

Payroll providers spend countless hours behind the scenes preparing for year-end, which unfortunately doesn’t mean wrapping presents. They are double-checking tax IDs, authorizations, wage bases, and confirming that companies are balanced. It's also important that payroll providers empower their customers to run payroll accurately and give them the tools to ensure they can use the time leading up to year end effectively.

To help, we put together our Year-end Playbook for Partners, which breaks down the year end process and shares best practices and tips.

Below, we're sharing a quick look from the Playbook, highlighting two reports that a payroll provider should have available to customers that can limit the amount of potential issues that can pop up at year end. Note that not all payroll providers use the same names for their reports, but the content should be the same. A customer will want to review:

  • Employee Address Report:
    An employee address report will ensure that if employees have moved throughout the year that their current address is on file. This is to make sure that physical W-2’s are sent to the right place. This will also help to identify tax updates that need to occur if an employee moved across state lines without notifying their employer. ProTip: this report should include terminated employees. Proactive outreach to terminated employees before year end can avoid a mad dash on January 31st when they call looking for their W-2.
  • Employee Detail Report:
    Payroll providers want to ensure that all employees have their legal name and accurate Social Security number on file before W-2 creation. While nicknames may be preferred for some employees and many HR systems allow for this inclusion, it’s important for the W-2 to reflect the employees legal name. Empowering the employer to do a review with their staff to ensure all employees are appropriately identified can save a lot of time when W-2’s are posted.  

Employee demographic data is critical to a clean year end, but there are also some additional items a payroll provider should be calling out for review.

  • Employee and Contractor Payments:
    Payroll providers should be notifying their client base to review  any payments that have been paid outside of the payroll system. Bonuses, gifts, or payment corrections handled directly with the employee need to be recorded in the payroll system in order to be included on the W-2. Providers need to make sure that their client base logs those payments before year-end.  This proactive notification is a great way to avoid running out of time to process as the end of the year draws near.
  • Employee benefits and deductions:
    Employees will select 401k plans, healthcare, FSA/HSA, and a multitude of other benefits. Certain benefits need to be reported on the W-2. Employers should confirm which deductions they expect to have reflected in order to reduce the number of W-2’s that are incorrectly claimed to be inaccurate. While breaking out 401k amounts is required, an employee might not see dental and vision coverage displayed independently on their W-2. 

A good payroll provider helps their customer base conduct a proactive review of demographic data and earnings. Providers should give their customers the tools they need and remind them to conduct these audits to ensure a smooth year end. 

At Check we’re working alongside our partners to ensure they have these tools to give to their customer base. To receive a copy of our Year-end Playbook, email

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