Year-end payroll review: checking wages, benefits, and ledger balances

Compare payroll registers with the ledger and filed quarterly returns. Identify corrections, off-cycle runs, voids, and provider transitions. Keep entity and employee totals consistent across the records.

Start early enough to resolve discrepancies before year-end forms are prepared. A correct final payroll run does not establish that earlier adjustments reached the tax filings and accounting file.

Check new hires, terminations, work locations, name and address changes, and approved compensation updates. Use the appropriate secure process for personal details and taxpayer information.

Have the payroll and tax specialists review owner compensation, reimbursements, and benefits requiring special treatment. An ordinary employee setup may not capture the requirements of an owner or shareholder arrangement.

Gather benefit reports and identify taxable or reportable items the provider needs. Confirm timing, amounts, and responsible reviewers. Do not add a year-end benefit adjustment based only on a general ledger account total.

Reconcile deductions and amounts remitted to benefit providers. Outstanding liabilities should have an explanation and an expected resolution date.

Review payroll clearing, accrued wages, tax liabilities, employee advances, and recoveries. Match cash withdrawals and retain support for amounts not yet paid.

For illustration, a $5,000 clearing balance might reflect a scheduled tax withdrawal, an omitted payroll entry, or a duplicate debit. The source reports should establish which explanation fits. A balancing journal without evidence can hide the error.

Save the reconciliation, correction log, benefit adjustments, final source reports, and reviewer approval. Confirm who prepares forms, checks submissions, supplies employees, and handles rejected filings.

Verify deadlines from the current instructions, including weekend and holiday adjustments. After forms are issued, keep any corrections linked to the original filing. The final package should explain how wages, liabilities, cash, and filed information agree, with unresolved agency or employee issues assigned to an owner.