Have you finished step one?Before jumping into this article, if you haven't read Step 1 – Prepare, we strongly recommend reading it first. |
The next step to ensuring you have a smooth Year-End is reviewing the Taxable Benefits paid out to employees in the year.
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
- Process taxable benefit/deduction adjustments (e.g. company car benefits)
Part 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 2023 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.
Part 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 prior to running your final payroll of the year. To do this, in Payroll select the Benefits & Deductions tab and then click on Benefits from the dropdown options. From there you can update the benefit amounts as needed. For detailed instructions on how to update benefits, including tools to edit benefits in bulk, see our article titled Benefits & Deductions: Add Employees to Benefits.
If you are doing this after running your final payroll for the year, you can make the changes using the Year-End Adjustment Tool.
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