Itâ€™s that time of year again! Over the next few weeks, weâ€™ll share some handy hints and tips on how to simplify Payroll Year end with Xero.
Recently, we announced a new payroll partnership with Gusto, a full-service payroll solution in all 50 states. As a result, Xero payroll will no longer be available after 2018 and we strongly encourage our payroll users to opt-in to assisted Gusto migration. If youâ€™d like to migrate to Gusto, hereâ€™s what to expect:
- Xero will securely migrate your payroll data into a new Gusto account. Once migration has been completed, youâ€™ll receive a confirmation email from Gusto, along with additional steps you need to take to complete your Gusto setup
- Youâ€™ll continue using Xero payroll through 2018
- Xero will handle your year-end filings
- Youâ€™ll begin using Gusto payroll in 2019
- Promo: 50% off Gusto for 6 months. 1st payroll must run before 1.31.2019.
If Gusto payroll doesnâ€™t fit your business needs, feel free to browse other payroll providers within the Xero app marketplace.
If youâ€™re processing payroll in Xero to complete 2018, the following can help your year end, smoother:
- Enter pay runs with a check date of December 31, 2018 or prior to be included on 2018 W-2.
- Verify that benefits and deductions have been set up and the withholding is accurate.
- Verify any payments that need to be reversed have been completed.
- Verify these common taxable fringe benefits are set up are correctly:
- Group-term life insurance in excess of $50,0000
- S-Corp Health Insurance for 2% shareholders
- Personal use of company vehicle â€“ PUCC
- The tax liability account debits on the pay period end date and credits on the check date. Â While thereâ€™s no difference at year end, you may need to create a manual journal entry if you need the tax liability credit to appear in the same year as the pay period end date for financial reporting.
- The paycheck is considered as taxable income in the year the paycheck is dated, even if the work was done and the pay was earned in a different year.
- Check for incorrect social security numbers. Having invalid information can result in issues with filing the W-2.
- Use the W-2 preview function to verify wages, federal & state taxes, employee address, retirement plan contributions, and other W-2 data such as health savings account and dependant-care contributions.
- W-2s will include all wages paid with a check date in 2018.
Thereâ€™s some helpful tips in Xero Central so you can breeze through year end in Payroll. Remember, itâ€™s best to start reviewing accounts for accuracy and reconciling early. For Payroll, make sure the final pay runs and tax filings are up to date for the end of the year. Need to know more? Check this Xero Central support article for a step-by-step guide.
Join our live webinar on November 14, 2018 where weâ€™ll discuss getting ready for year end and winding down payroll in Xero.