Preparing for Year-End 2021
End-year preparations are accompanied by immense stress for the Payroll departments. From updating employees’ information to updated government mandates, advisors have had to fulfill their roles meticulously this year.
And while 2021 has been a better year compared to 2020 in terms of employment security and wage uncertainty, it has been quite challenging as businesses try to adjust to the fluctuating economic environment caused majorly by the global pandemic. Companies are still facing the dilemma of cutting back employees’ salaries to reduce labor expenses.
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Updating Employee Records
It’s clear that handling payroll is a sensitive matter, the slightest mistakes can gravely impact employees and have emails and call flooding in for payroll staff. Errors can interfere with employees’ future pension plans and attract legal issues, hence during this year-end, employers should ensure all employees confirm and update their employees’ records to ensure status, social security numbers, tax ID, addresses, and names are properly indicated. During this season, employers should use the time ahead of the tax filling storm season, to minimize confusion.
Updating employee handbook
Human resources are also tasked with updating the employee handbook at the year-end. Following the different regulations prompted by the global health crisis, human resource managers should add new information in handbooks to ensure information is adjusted accordingly.
Reviewing benefits and paid leave
Payroll additionally needs to review any legislation regarding taxation (for the following year) and apply for the next year’s tax rates. Employers are also required to calculate employees’ paid-time-offs and update balances. Don’t forget, health insurance policies also need to be updated and renewed if there are slight changes in prices.
Updating next year’s calendar
Year-end should prompt human resources to create or update the 2022 calendar to feature certain important events that should take place. These events include mandatory compliance training (safety, sexual harassment, use of software, etc).
Conclusion
Early preparations is important in ensuring an easy transition towards the new year with minimal errors. Payroll advisors should be able to view issues objectively when it has ample time to prepare and obtain all the resources needed to properly prepare for tax season ahead.
Want to learn more? Enroll for our live event, on December 1st, 2021:
Forms W-2 for 2021 and W-4 for 2022: The Information You Need to Know!
