Year-End Payroll, PTO, and Benefits Compliance Checklist for HR Teams

As the year comes to a close, HR teams face a critical period of compliance and planning. From managing payroll accuracy to ensuring PTO policies are followed and benefits are properly administered, there’s no shortage of tasks that demand attention. To help you navigate this busy season, SolveHR has compiled a comprehensive checklist to guide your HR team through year-end compliance with confidence.

Why Year-End Compliance Matters

Year-end tasks are more than routine—they’re essential for staying compliant with federal and state laws, maintaining employee trust, and setting your business up for a smooth transition into the new year. Overlooking critical deadlines or requirements can result in penalties, employee dissatisfaction, and unnecessary stress.

The Year-End Compliance Checklist

1. Payroll Accuracy and Reporting

• Reconcile Payroll Records
  • Ensure all payroll records match year-to-date totals for wages, withholdings, and deductions.
  • Confirm that taxable fringe benefits (e.g., bonuses, stipends, or gifts) are included in taxable income.
• Prepare Year-End Tax Forms
  • Verify employee W-2 forms and independent contractor 1099 forms for accuracy.
  • Submit forms to the IRS and distribute them to employees by the January deadline.
• SolveHR Tip: Use SolveHR’s payroll solutions to handle year-end reporting efficiently and avoid errors.

2. Paid Time Off (PTO) Management

• Review PTO Balances
  • Audit unused PTO balances to ensure they comply with company policy and applicable laws.
  • Determine whether unused PTO rolls over, is paid out, or expires at year-end.
• Communicate Deadlines to Employees
  • Send reminders about PTO policies and encourage employees to schedule remaining time off.
• Update PTO Policies
  • Consider revising PTO policies for the upcoming year to reflect employee feedback or compliance changes.
• SolveHR Tip: SolveHR can help you audit your PTO policies and ensure they align with both business needs and legal requirements.

3. Employee Benefits Compliance

• Review Benefits Enrollment Data
  • Verify that all changes made during open enrollment are reflected in payroll and benefits systems.
• Confirm ACA Compliance
  • Check that Affordable Care Act (ACA) reporting requirements are met, including filing Forms 1094-C and 1095-C.
• Audit Benefit Deductions
  • Confirm that all employee benefit contributions (e.g., health insurance, retirement plans) are accurately deducted.
• SolveHR Tip: Partner with SolveHR to ensure your ACA reporting and benefits administration are accurate and timely.

4. Employee Communication and Documentation

• Distribute Year-End Notices
  • Provide employees with year-end pay stubs and summaries of benefits.
• Communicate Policy Updates for the New Year
  • Notify employees of changes to payroll, benefits, or company policies effective January 1.
• SolveHR Tip: Use SolveHR’s expertise to craft clear, compliant communications tailored to your workforce.

5. Compliance Audits and Updates

• Conduct an Internal Audit
  • Review employee classifications, overtime compliance, and tax withholdings for any discrepancies.
• Update Employee Records
  • Ensure all employee records are accurate and up-to-date, including personal details, job titles, and salary information.
• SolveHR Tip: SolveHR offers compliance audits to identify and resolve risks before they become issues.

Best Practices for a Stress-Free Year-End

1. Start Early
   • Begin your year-end processes in November to allow ample time for audits and corrections.
2. Leverage Technology
   • Use HR and payroll software to automate calculations, track PTO, and generate compliance reports.
3. Partner with a PEO
   • Outsource complex HR and compliance tasks to SolveHR to save time and reduce errors.

How SolveHR Can Help

SolveHR understands the complexities of year-end compliance and offers a range of solutions to support your business. From payroll processing and PTO audits to benefits administration and ACA reporting, our team of experts ensures that your HR tasks are handled efficiently and accurately. With SolveHR as your partner, you can focus on strategic goals while we manage the details.Year-end compliance doesn’t have to be overwhelming. By following this checklist and partnering with SolveHR, your HR team can close out the year with confidence and set the stage for a successful 2026. Contact us today to learn more about our year-end services and how we can help your business thrive.