Checklist: Start here to prepare for 2023 year-end payroll
From staffing for the holiday season and processing year-end bonuses, to closing out the 2023 books and reporting annual returns, we know this is the busiest time of year for businesses of all sizes.
That's why we've put together this calendar of important deadlines, to help you wrap up 2023 with confidence.
Before Friday, December 15th, 2023
Submit any payroll adjustments that may impact employee W-2s
Any adjustments to a pay run that has already been processed must be received by OnPay no later than Friday, December 15th, 2023 to ensure the timely completion of the W-2 information update. This includes supplemental wages and Third-Party Sick Pay (with notice provided by an insurance company).
Note: Third-Party Sick Pay can only be added to employee W-2s by OnPay, and only upon our receiving a copy of the notice provided by an insurance company what should be added to the employee's income.
Before Thursday, December 21st, 2023
Process supplemental pay runs
Because banks will be closed on Monday, December 25th, be sure to process payroll with enough time for wages to be received by December 31, 2023. This includes any supplemental pay, like bonuses or tips.
Last chance to max-out 401k, Roth, and IRA contributions
Ensure that any additional contributions toward employee retirement plans are received before year-end.
Depending on the amount, bonus pay runs often require extra time due to IRS Next-Day Rules and pre-approved direct deposit limits.
Before Friday, December 29th, 2023
Because the last day of 2023 falls on a Sunday, we recommend that you have these tasks completed by Friday, December 29th.
Confirm your company information
Confirm the following information in Company Profile:
- Company name is spelled correctly
- Company address is accurate
- Federal Employer Identification Number
Confirm the following information in Payroll Taxes:
- State Tax ID for each state where you pay employees
- Federal Employer Identification Number
Verify Employee and Contractor data
Confirm that the following information is accurate for all employees and contractors paid in 2023:
- Confirm that employee names are correctly spelled
- Update home addresses/mailing addresses for both active and terminated employees
- Verify that employee Social Security numbers are correct
- Confirm that contractor/business names are spelled correctly
- Update mailing addresses for active and terminated contractors
- Verify that Social Security numbers, ITINs, and Employer Identification numbers are correct
Verify Payroll and Year-to-Date data
Ensure all payroll entries are completed by Sunday, December 31st
To ensure that all tax payments can be made on time, all contractor payments, W-2 earnings, and bonuses, must be completed in OnPay by Sunday, December 31st, 2023. Any entries not made by Sunday, December 31st, 2023, could result in IRS and/or State Penalties and Interest which would be the sole responsibility of the employer.
Review W-2 Preview File
Preview your W-2s to review year-to-date payroll data for accuracy. Remember to include supplemental pay, like commissions or tips, as well as any Third-Party Sick Pay entries.
S-Corp Shareholder (2% or More) Benefits
If your business is organized as an S-Corp, add any shareholder health or auto benefits for 2023 by following these steps: Adding 2% Shareholder Benefits to W-2s.
Record Employer Health Care Contributions
Has your business paid all or a portion of any employee health insurance premiums throughout the year? That data needs to be reported on each employee's W-2, along with any premiums that the employee has paid toward a company-provided plan. You can find out how to Record Health Care Contributions in OnPay here.
Third Party Sick Pay
Third Party Sick pay includes any insurance payments received by an employee through an insurance company and is considered earned income for the employee. The insurance company will provide a notice that details what should be added to the employee's income. To have these amounts added to the employee's W-2, please send the notice to OnPay. These items must be received no later than Friday, December 30th to ensure timely completion of the W-2. You can review any Third Party Sick Pay entries on the W-2 Preview.
Services like personal use of company cars, gift cards, and gym memberships are taxable. Ensure that entries which document any fringe benefits received are made to an employee's payroll history. For more information on Taxable Fringe Benefits, please refer to IRS Publication 15-B.
Run year-end bonus payroll
Ensure all bonus payroll entries are submitted by December 21, 2023
If you need to submit bonus pay runs before year-end, allow enough time for them to process in 2023. Depending on the amount, bonus pay runs often require extra time due to IRS Next-Day Rules and pre-approved direct deposit limits.
Get Compliant for 2024!
Review Federal and State Law Changes that may impact your business
A number of states across the US have payroll-related changes that will take effect in 2024. These changes include Minimum Wage changes, updated state unemployment wage bases, and new Paid Sick or Family Leave Laws. These changes are announced state-by-state, and are updated accordingly.
If your state unemployment rate is changing for 2024, please make sure to update your OnPay account with the new rate before January 1st, 2024.
Order New Compliance Posters
With all the changes states have recently made, it's a good idea to order new posters for your office. Follow the below link to see what's changed. You can even order new posters!
Update deposit frequencies and tax rates
All new withholding deposit frequencies and unemployment tax rates with an effective date of January 1st, 2024 must be entered into OnPay on or before December 31st, 2023.
Before Friday, January 5th, 2024
Choose your W-2/ 1099 Processing Option
When it comes to providing required W-2s or 1099s to your employees and contractors, OnPay offers you two easy options. We generate all forms for free, right in OnPay, to give you and your workers instant and direct access.
- Employees and contractors can access digital copies in their OnPay portal
- You can print these forms to deliver them to your workers by hand (must be received by 1/31/24) or by mail (must be postmarked by 1/31/24)
- You can also choose for OnPay to print and mail these forms for a small fee
Before Wednesday, January 31st, 2024
Postmark year-end forms
- All workers must be in possession of their year-end forms by or before january 31, 2024
- If you opted to print your own W-2’s and 1099’s, you are required to postmark or provide copies to employees no later than 1/31/24.