End of year is a busy time for payroll as Hawaii employers get employee data organized for tax season and ready to start the new year. After the last payroll of 2018 is complete and before the first payroll of 2019 is started there is a list of things that should be accomplished.
Hawaii employer’s payroll checklist to complete after last 2018 payroll and before first 2019 payroll
1. Check employee and employer indicative data:
Indicative data is employee data gathered in HR systems that is relevant to benefits and payroll service providers.
- Check to make sure that terminated employees are not carrying balances for vacation and sick time or loans and garnishments.
- Ensure that terminated employees have been purged from the system appropriately.
- For active employees check for inconsistent data including missing or invalid social security numbers and missing or old addresses. Have employees double check and sign off on their data.
2. Go over wage, tax and benefits information:
- Test the reasonableness of employer’s matching Social Security tax, Social Security tax withholding, Medicare withholding, matching Medicare tax and state unemployment insurance tax.
- Make sure that the Earned Income Credit (EIC) coding has been submitted properly.
- Look for discrepancies such as qualified pension discrepancies.
- ,Verify the Hawaii disability insurance rate and taxable wage limit.
- Verify the employer’s state unemployment insurance tax rate and taxable wage limit for each state where the employer has workers.
- Compare and reconcile differences in payroll register totals to Form W-3 totals; Forms W-2 to state and local report totals; and total wages reported for each tax.
- Check to see if reported taxes from Form W-3 equals tax deposits (total of Forms 941).
- Check for mandated tip allocations for tipped employees.
- Check for excess contributions to qualified retirement plans.
- Check contributions to and distributions from Section 125 (cafeteria) plan for child care and medical care reimbursements.
- Make sure that employee requests for fringe benefit deduction changes have been applied.
- Make sure that any employee tax and/or taxable blocks that are no longer wanted have been removed.
- Confirm the settings and clearing of special accumulators for the new year.
3. Take care of special procedures:
- Go over schedule of pay dates, period ending dates and quarter closing dates to ensure that they fall on desired dates and not on holidays or weekends.
- Schedule any special bonus payrolls.
- Verify that the new year month-end close-out dates are accurate.
- Verify that management reports for the new year are scheduled, and will include the correct weeks and process.
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