Nov 10, 2024

Your Guide to Navigating 2024's Payroll Year-End

Your Guide to Year-End Payroll Procedures

Taking care of year-end payroll is an essential part of running a business–you’re ensuring that all of your employees and contractors have been appropriately compensated for their work, evaluating your tax liabilities, and remedying any issues in your payroll records.

From filing your FPS to sending out your P60s, these processes are legal requirements for all businesses–failing to complete them could lead to tax penalties, unbalanced books, and other issues that put your company at risk.

To avoid these pitfalls, it’s essential to take the proper steps to complete your year-end payroll. But, if you need help along the way, don’t sweat it! We’ve put together this step-to-step guide for all things year-end payroll. Read on to learn about all the essential steps of the process.

Confirm the final week of your payroll (it may not be week 52!)

Knowing when your yearly payroll ends is crucial to processing your year-end payroll properly. Typically, week 52 is the final week of a company’s payroll. However, the exact date of the end of your payroll can vary, sometimes going past week 52; it can even extend to week 56 in some cases.

So, how do you know which week is the last of your payroll if it’s not week 52? If your payroll is processed monthly, you don’t need to worry about this–monthly payrolls last 12 months and therefore always end on week 52. However, your company’s payroll may go past week 52 if they are instead processed once a week, bi-weekly, or once every four weeks and if April 5 is a payroll date for you–or, in the case of leap years, April 4.

Weekly payrolls that land on April 5 will go to week 53, two-week payrolls extend to week 54, and four-week payrolls end on week 56.

Make sure to switch employees to a week one tax code for their extra payrolls if your business falls into this category–otherwise, they’ll end up paying too much in taxes for the year!

Verify employee and company information, wages, taxes, and benefits

Providing the correct information is essential for adequately processing your year-end payroll. Here are several critical factors to verify:

Company and employee information

First thing’s first: make sure all of the information you’re providing about your company and your employees is accurate. If your files include incorrect information, you could face penalties, so this isn’t a step to overlook. Start by double-checking and making necessary updates to your company name, tax IDs, and tax information.

Next, verify the details of your employees, such as their full legal names (with proper spelling!), national insurance numbers, contact information, and addresses. Keep in mind that addresses may be subject to change, so ensure their accuracy.

New employees and employees who have left

In addition to updating employee information, you should also take extra care to make sure all of your new hires and any employees who have left the company or taken leave have been updated on your payroll.

Wages, taxes, and benefits

In addition to employee and company information, it’s also essential to verify all the numbers on your payroll when it comes to things like wages, taxes, and benefits.

Cross-check information such as year-to-date wages and taxes, pre-tax amounts, numbers of exemptions, paid time off balances, any benefit changes, and the worker status of each of your employees.

This can be a lot to keep up with–keep in mind that with Moonworkers, our software will take care of it for you!

Submit your final FPS and process your year-end

Once you’ve figured out which week your payroll ends and verified the accuracy of all the information you have on file, it’s time to send out your final full payment submission (FPS) of the year and your EPS if this applies to you.

You’ll submit these documents just as you have every other time throughout the year–no particular circumstances are for the final ones. Just make sure you get them in by the deadline of April 19, and triple-check to catch any possible errors.

After that, you’re ready to process your last payslips and close out the payroll year on your payroll software!

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Prepare and provide P60s to employees

Next up, it’s time to get your P60s ready to be sent out to all of your employees.

P60s allow employees to see exactly how much they were paid and what deductions were made over the year. You’ll need to ensure the P60s of anyone working on April 5 (the last day of the tax year) reach them by May 31. Just make sure you wait until after you’ve issued your final payslip before creating your P60s, and provide your employees with ample time to correct any errors on that payslip before moving forward.

Payroll software like the kind we provide our clients with at Moonworkers makes it easy to create P60s and share them with all of your employees, whether digitally or with a physical, printed copy.

Prepare for and start your new payroll

Once your FPS has been sent and you’ve dispatched your P60s to all of your employees, it’s finally time to start your new payroll!

Before doing so, consider proper preparation by referring to the P9X. This document outlines any changes tax code employers need to make as they enter the upcoming tax year.

It’s impossible right now to predict exactly which changes you will need to make on your upcoming payroll, so our best advice is to be sure to take a look at the P9X before moving forward!

Additionally, take care of payroll processes such as renewing the CA2700 certificates of any employees who have been deferred National Insurance and reviewing employees who are receiving childcare vouchers with a Basic Earnings Assessment to make any necessary changes.

Process your payroll with Moonworkers

At Moonworkers, we know our clients care about running a successful business, which means carefully and attentively carrying out all of the processes that come along with year-end payroll.

When you need a helping hand, we’re here to deliver. Our payroll automation makes paying your employees simpler than ever–and when the end of the payroll period rolls around, we can help you end the tax year with just a few clicks!

Payroll processes may seem daunting, but they don’t have to be complicated. Contact us today and book a demo to learn more about how we can help you manage your payroll–and much more!--with ease.