As this year wraps up, The Square Payroll Team recommends that you read through this article for end-of-year (EOY) payroll information.
Review Employee Information
Confirm your employees’ name, Social Security number, and address. This information will be printed on their Form W-2. We will attempt to mail each employee their W-2 to the address provided. If the delivery attempt is unsuccessful, you are responsible for providing Form W-2 to your employee.
Learn more about downloading, verifying and distributing Form(s) W-2.
Add All Former Employees to Square Payroll
Double-check that all employees paid this year, including those who no longer work for you, have been added to Square Payroll. You are responsible for providing Form W-2 to all employees that worked for you in the previous year.
Send Your Final Payroll
Payroll taxes are due based on the pay date – not the days employees worked. Any paychecks with a pay date in January 2018, regardless of the actual pay period, will be included in 2019 for tax purposes (and annual W-2s). If you’d like wages to be included in 2018 W-2s, make sure the pay date is in 2018 before sending.
You’ll be able to send Off-Cycle Payments for 2017 until January 8, 2019 (1/8/2019).
Pay Year-End Bonuses
You can pay year-end bonuses with an off-cycle payment. You will need to select the Bonus or Supplemental Pay Payment Type, and enter the amount under the Additional Pay column. Taxes will be calculated using the supplemental withholding rate. If you want bonuses to count towards 2018 wages, submit this off-cycle payment by January 8, 2019.
Note: Off-cycle payments processed in 2019 may result in tax penalties, so we recommend doing this as early as possible.
Reset Sick or Paid Time Off Balances
Employee paid time off balances automatically roll over to the new calendar year. If you would like to reset your employee’s PTO balances for the new year, we recommend doing so after you send your last W-2 run for the prior year. Each employee’s PTO balance can be updated on the employee’s profile on the Team tab of your Payroll dashboard.
Employee sick time balances also automatically roll over to the new calendar year. You may be required by law to carry over accrued and unused paid sick tie to the new year, depending on your state.
Reset Benefit Contribution and Post-Tax Deduction Limits
Benefit and post-tax deduction limits apply to each calendar year. For benefits managed outside of Square Payroll, you can set up and adjust annual contribution limits for each benefit on the employee’s profile on the Team tab of your Payroll dashboard. We recommend setting up your 2019 contribution limits prior to sending your first pay run in 2019. If no benefit or post-tax contribution limit is set, we will default your 2019 limit to your 2018 limit.
No action is required for employers using our SimplyInsured, Guideline of Alice benefit integrations.
Update Unemployment Insurance (UI) Rate
Once you receive your new UI rate, you can update it the Settings tab on your Payroll dashboard. We recommend doing this before your first payroll of 2019. If you are in CA, NY, VA, PA, or WI, we will automatically update this rate for you and no action is required.
S-Corp Health Insurance Reporting
Health and accident insurance premiums paid on behalf of a greater than 2-percent S corporation shareholder-employee are reported as wages on the shareholder-employee’s Form W-2 and subject to income tax withholding.
California FUTA Tax Collection
As of November 10, 2018, California has repaid it’s outstanding loan balance and there will be no FUTA credit reduction collection for employers in this state for 2018. You can read more about it on the Department of Labor website as well as the CA EDD website.