The next step to ensuring you have a smooth Year-End is reviewing the "Taxable Benefits" paid out to employees in the year.
Important note
Before jumping into this article, if you haven't read Step 1 – Prepare, we strongly recommend reading it first.
There are two things to do when reviewing the taxable benefits:
- Ensure that taxable benefits are reported each pay period as they are received or enjoyed
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Process taxable benefit/deduction adjustments (e.g. company car benefits)
1. Ensure taxable benefits are reported each pay period as they are received or enjoyed
It's critical to ensure that you've paid out and/or reported the correct amount of "Taxable Benefits and Deductions" for each employee throughout the year so that your employees are correctly taxed.
For many plans, the plan determines the value of the benefit and deduction for the plan year, and the benefit or deduction is allocated to payrolls throughout the year. As a payroll administrator, you must verify that the benefit or deduction for 2022 is equal to the benefit's stated value.
Although there are several ways to accomplish this in Humi, we recommend the Year-to-date Report, which can be found in "Reporting" under the "Payroll" tab.
This report will show you benefits, broken out by pay period, and the total for the year. Learn more about the Year-to-date report here.
2. Process taxable benefit or deduction adjustments (e.g. company car benefits)
If you find that a taxable benefit was not properly reported, you must correct this before submitting your T4s.
In Humi, you have a few options for making these changes. If you do this before running your year-end payroll, you can simply adjust the taxable benefits on the year-end payroll.
If you are doing this after running your final payroll for the year, you can make the changes using the Year-End Adjustment tool.