When is it Too Early to Plan for Next Year? The Answer is Never

It's never too soon for a business to start payroll planning for next year. There are so many compliance deadlines scattered throughout the year that it can be mind-boggling if you don't keep up and start prepping early. Getting ready with time to spare ensures smooth transitions, compliance, and accuracy.

Waiting until year's end can lead to many headaches when you realize you've missed deadlines. Here's a closer look at payroll and compliance and how to ensure that you have an error-free year.

Understanding the Year-End Payroll and Compliance Cycle

Have you prepared tax forms W-2, W-3, 1099-NEC, 940, 941, and 944? Great! You've barely scratched the surface when it comes to year-end payroll and compliance.

W-2s have to be given to employees and 1099s to your contractors by January 31st. You also need to submit the proper forms to the Social Security Administration and possibly to other agencies, depending on what state or county your business is in. In addition to tax documentation, you need to determine adjustments to benefits like health, dental, and vision insurance for the new year and each employee's paid time off (PTO) balance.

After verifying any new tax rates for the upcoming year, you'll also want to update the payroll schedule. You'll also want to get your HR compliance calendar ready for the upcoming year, so you don't miss any filing deadlines.

Benefits of Starting Early: Accuracy, Compliance, and Peace of Mind

Here are just a couple of 2025 filing deadlines to give you a sense of what you're up against. February 10, 2025, is the deadline to file your annual Form 940 -- but only if you've paid your FUTA taxes on time. March 2, 2025, is the deadline to electronically file your OSHA Form 300A, which includes all reportable injuries and illnesses that have happened in the workplace.

Got it? Those are just a couple of examples of the dozens of compliance deadlines that are staggered throughout the year, before you even get to Tax Day on April 15th.

If you don't plan out a calendar for the year and start early, you're likely to miss deadlines and make mistakes. You can also end up providing employees with inaccurate information. Early planning will help improve overall business efficiency because you won't be hit by any surprises.

Key Areas for Payroll and HR Preparation

There are quite a few key areas that you need to review and plan for ahead of the next year.

• Payroll schedule adjustments - These include employee pay raises, year-end bonuses, and corrections to any overpayments made during the year.
• Updates on tax rates or filing requirements - The federal and state governments will let businesses know well in advance of any changes to tax rates or filing deadlines and when they go into effect.
• Employee benefits and deductions - These should be reviewed and updated for the next year if necessary.
• Preparing employee documentation for the new year - Life changes for employees can mean changes to payroll and deductions, as well as their classification as full-time employees or contractors.

Tools and Resources to Assist with Payroll and HR Planning

HR software can be a great tool to help with tax season preparation and payroll compliance. They're programmed to ensure that you never miss an important deadline and will help to streamline many of your payroll and tax processes. Preparing a year-end payroll checklist for your team can also be a huge help.

There are so many HR and payroll tasks and deadlines to meet that it can detract from your main goal of sales or service. Working with a payroll provider can be a way to reduce these administrative burdens for you. Exact Payroll can help you through the planning cycle with our processing and management services.

Next Steps: How Exact Payroll Can Help You Prepare for Next Year

Exact Payroll can provide all the payroll processing and planning assistance that you need. Our small business software provides multi-state tax services, full-service payroll processing, and general ledger reporting that integrates with popular accounting software.

We make payroll management, tax planning, and compliance services a breeze for our clients. Our payroll experts are available 24/7 to provide any assistance you need. If you connect with Exact Payroll for a consultation with our team, we can help ensure that you're fully prepared for the year ahead.

Start Today for a Stress-Free New Year

It's never too early to start payroll planning for next year. Compliance requires knowing a dizzying number of deadlines and forms and their filing deadlines, not to mention changes to employee compensation, classification, and benefits. Setting an HR compliance calendar early will streamline your business operations and ensure that there are fewer errors or surprises during the year.

Ready to streamline next year’s payroll and HR compliance? Schedule a consultation with Exact Payroll today.