End of the year process for Payroll and new Fiscal Year preparation.

Information  

• Products: Sparkrock 365 

• Summary: End of the year process for Payroll and new Fiscal Year preparation. 

Details 

This article provides insights into the year-end preparations for the Payroll team at SR365, detailing the essential processes and key considerations like generating the T4 (Canada)/W2 (US) documents for your employees, processing the end-of-the-year carry forward absences, getting the updated Tax settings from the PRIMO connector, and the mass update for claimed credit for employees who do not claim the basic personal exemption. 

Resolution  

These steps can be performed in any order or the arranged order in this article; 

1. Generate Tax Documents: 

• Canada: T4  KA-03518 to efficiently generate T4 tax documents for employees. 

• US: W2 – KBA in progress. 

2. End-of-Year Absence Carry Forward: The EOY Carry Forward Worksheet page is used to move end-of-year (EOY) excess balances from one cause of absence code to another. The worksheet can also be used to clear balances on cause-of-absence codes. - Process End of Year Carry Forward (sparkrock365.com) 

3. Update Tax Settings: Employ the "Get Tax Settings" feature within Payroll Setup to ensure the latest tax settings are applied for the upcoming fiscal year from the Primo connector. You can run Get Tax Settings whenever you want. The tax rate is based on the pay period currently being processed. 

• Note: Tax settings for 2024 are available since December 08, 2023. The new tax rates can be verified under Payroll Tax Setup. e.g for CAD, you will find all the new entries under Jan 01, 2024

4. Mass Update Claimed Credits: In SR365, we have added the ability of mass updating Claimed Credits for employees who do not claim the basic personal exemption. The steps to mass update claimed credits are listed below; 

• Navigate to Payroll Employees >> Proces >> Fed/Provinces Withholding Setup. 

 

• Click on Actions >> "Update the Claimed Credits"

 

• The Updated Claimed Credits processing report dialog box pops up 

 

• In the dialog box input the following information; 

New Start Date: Enter the first date of the new fiscal year (01-01-2024) 

Change in Claimed Credits: Enter the difference in basic claim amount from the previous year 

Filters: You can utilize filters in any way that you wish 

• When you click OK, the system will cycle through all records in the table where the current value of Claimed Credits is not equal to 0.  As a reminder, if the Claimed Credits is 0, the system will assume the employee is claiming the basic exemption, and updates are not required from year to year. 

• Here is the result of the procedure where a 2,000 difference is entered: 

Important: 

• Pay attention to what you do throughout the year especially any new Payroll Codes or Process Procedures to prevent surprises. 

• Run reports and calculations multiple times during the year to ensure that any issues are caught well in advance of year end. 

•  Run T4s and W2s and check them 

•  Run 941 Reconcile Report as frequently as possible (each payroll) 

• Run Distribution Manager to review who has received and who is still pending. 

Impact / Risks  

• Delayed T4/W2 Generation: 

• Impact: Employees may experience delays in filing their taxes. 

• Risk Mitigation: Regularly monitor the T4/W2 generation process, ensuring it aligns with the expected timeline. 

• Absence Carry Forward Errors: 

• Impact: Incorrect carry-forward balances may lead to discrepancies in employee leave entitlements. 

• Risk Mitigation: Carefully validate the End-of-Year Absence Carry Forward process to prevent errors. 

• Outdated Tax Settings: 

• Impact: Application of outdated tax settings for the upcoming fiscal year may result in payroll inaccuracies. 

• Risk Mitigation: Ensure you update tax settings using the "Get Tax Settings" feature and confirm the availability of the new tax rates. 

• Mass Update Claimed Credits Errors: 

• Impact: Incorrectly updating claimed credits can affect employees' tax withholdings. 

• Risk Mitigation: Exercise caution during the mass update process, double-checking inputs and conducting thorough testing. 

• Unanticipated Payroll Code or Process Changes: 

• Impact: Unplanned changes may lead to discrepancies and challenges in the payroll process. 

• Risk Mitigation: Keep a vigilant eye on any new payroll codes or process procedures introduced throughout the year. 

• Late Verification of T4s and W2s: 

• Impact: Late identification of errors in T4s and W2s may result in compliance issues. 

• Risk Mitigation: Regularly run and verify T4s and W2s well before the year-end deadline. 

• Infrequent 941 Reconcile Report Runs: 

• Impact: Infrequent reconciliation increases the likelihood of overlooking discrepancies in payroll taxes. 

• Risk Mitigation: Run the 941 Reconcile Report regularly, preferably after each payroll cycle. 

• Distribution Manager Delays: 

• Impact: Delays in reviewing distribution may lead to incomplete or delayed communication. 

• Risk Mitigation: Run the Distribution Manager promptly to review and address any pending items. 

Workaround  

Not Applicable 

Related Information  

Generate T4 Tax - KA-03518  · Customer Self-Service (sparkrock.com) 

Process End of the year carry forward absences - Process End of Year Carry Forward (sparkrock365.com) 

Update History  

The following are the dates and actions pertinent to the history of this issue. 

Attachment  

Not Applicable