Your HR, Benefits, Compensation, and Payroll Checklist
As the calendar year draws to a close, HR professionals know that December 31st isn’t just another date—it’s a critical deadline. To help you wrap up the year smoothly and set your organization up for success in 2026, here’s a practical checklist covering some important year-end tasks across HR, benefits, compensation, and payroll.
HR: Update Employee Records and Compliance
- Review and Update Records: Ensure all employee contact information and emergency contacts are current. Year-end is the perfect time to catch up on these details.
- Compliance Checks: Verify that all required training courses are complete for the year. Staying proactive with compliance helps prevent surprises and keeps your organization audit-ready.
- HRIS Audits: Outdated or blank information in your HRIS applications can sometimes be overlooked. If you are working in multiple systems, you are likely to find differences. Develop an audit process to identify and fix critical information stored in your systems.
Benefits: Process Changes and Communicate Updates
- Enrollment Changes: Make sure all benefit changes—open enrollment, new hires, and life events (which all can happen at the end of the year)—are processed accurately and take effect as intended.
- Plan Reviews: Confirm that your benefits plans align with any upcoming changes or renewals, and communicate these updates clearly to employees.
- Audits: Take your list and check it twice. Few things are more frustrating than after-the-fact enrollment and benefit premium errors.
Compensation: Document Adjustments and Bonuses
- Pay Adjustments: Review and document any end-of-year raises or changes. Ensure compliance with federal and local FLSA requirements, including any minimum wage and exempt salary thresholds and tests, which may have changed.
- Bonuses: If your organization offers performance-based or holiday bonuses, confirm eligibility and prepare for smooth processing in the new year.
Bonuses and Gifts: Tax and Compliance Reminders:
- Cash Bonuses: These are considered supplemental wages and may need to be included in regular rate of pay overtime calculations for non-exempt employees. They are subject to applicable tax withholdings—use the IRS’s current Employer’s Tax Guide and local tax withholding guidance for reference.
- Non-Cash Gifts: Small tokens may be considered de minimis and not taxable, but check IRS guidelines—significant or frequent gifts could be taxable income.
- Gift Cards: Treated as cash equivalents by the IRS, gift cards must always be included in wages, taxed, and reported on Form W-2, regardless of amount.
- Documentation: Always record the type, value, and recipient of each bonus or gift. When in doubt, consult MRA’s HR Hotline, tax advisor, or legal counsel.
Payroll: Reconcile and Prepare for Tax Season
- Payroll Accuracy: Double-check your final payrolls for the year and reconcile all 2025 pay dates.
- Tax Documents: Begin the process of preparing W-2s and other tax forms now to avoid January stress.
- Stay Informed: Keep up with legislative changes, such as new tax rates, applicable provisions of the One Big Beautiful Bill Act, and seek guidance as needed.
- Audits: Design an audit process that ensures flawless timekeeping and payroll processing and catches unintentional and intentional mistakes. Limit and audit user access to systems to prevent misuse.
Final Thoughts
Meeting year-end deadlines isn’t just about compliance—it’s about supporting your team and setting everyone up for a successful new year. Take a deep breath, use your checklists, and keep your teams motivated. You’ve got this!
Best wishes as you wrap up the year.
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