Canada Year-End Payroll Activities and Tips for 2020

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Payroll Teams in Canada will soon face year-end payroll activities. Having a structured year-end project plan that lists specific tasks and the tasks’ owners is so important. It ensures all identified tasks are carried out, and it gives accountability. This will help take the guesswork and alleviate a lot of the stress that comes with year-end payroll. Now is a great time to start thinking about what reports you will utilize to reconcile tax forms data for your employees. As we all know, the end game is to make sure we get validated tax forms out the door and in the hands of our employees promptly.

What follows are recommended activities that should be completed before the January timeframe.

Related: COVID-19 Stimulus Payroll Impact: What Canadian Businesses Need to Know

A List of Year-End Payroll Activities for Canada

Here are tasks that should be completed before December:

  • Notify employees to review TD1 online.
  • Find the YE Master Note that needs to be followed until your tax forms are produced. This will help you get all OSS Notes updates related to Year-End.
  • Add a message to employee payslips regarding updating mailing address for tax forms. All employees receive some form of a payslip. This is the best way to get the message out.
  • Review benefits plans for changes
  • Test payroll calculations and posting
  • Process income transactions for federal taxes
  • SAP SuccessFactors Employee Central Payroll (ECP) customers should test and implement SAP HRSPs (support packs).

Not yet an ECP Customer? Read our whitepaper on rethinking, reimagining, and redesigning payroll with SAP SuccessFactors.

Here’s what to accomplish in December:

  • If you are utilizing a vendor to handle the tax forms’ mailing, this is a great time to get a vendor in place.
  • If you are producing and mailing the tax forms in-house, it’s important to make sure the forms fit in your envelopes before ordering full stock.
  • Balance your Payroll Reconciliation Report with the Payroll Journal.
  • Ensure to delimit the benefits for all employees on leave.
  • Run a viable claims report. Make sure to clear or resolve all outstanding items.
  • Validate holiday calendars, pay period, pay dates, provide any required configuration changes.
  • Balance CRA/ MRQ Remittances (PD7A) with the Payroll Reconciliation Report by Business Number.
  • Update tax infotype and TCode (transaction code) in SAP.
  • Run Tax Update Utility program for Company to Update TD1 Credits for New Tax Year.
  • Gather all year-end adjustments for upload, and upload year-end adjustments.
  • Run Claims Report Transaction and clear any outstanding items before the last year’s last payroll.

Wrapping up in January

If you’ve done the legwork ahead of time, then that should take some pressure off when it comes to kicking off the next year. In January, you’ll need to reconcile and balance your tax form files.

Staying on task with your year-end payroll activities will lead to less stress for you and your payroll team.

Want more on payroll? Check out SAPInsider’s State of the Market: Payroll and Its Impact on Cloud HR study.