Year-End Payroll Checklist for 2026: Key Dates & Steps
Oct 2, 2026
By Lacee Breeden, HireLevel
This year-end payroll checklist walks you through every step of closing out 2026, from verifying employee data in the fall to filing W-2s, 1099s, and ACA forms in early 2027.
Year-end payroll isn’t one deadline. It’s a string of them, running from your last check date through March.
Most year-end payroll problems don’t happen in January. They start in October and November, when a misspelled name, a missing W-9, or an unrecorded fringe benefit slips through and nobody catches it until the W-2s are already printed. By then, fixing it means corrections, reissued forms, and a lot of back-and-forth with employees who just want their tax documents. The good news: nearly all of it can be avoided with a little prep now. Below is the checklist we walk our own payroll clients through, broken down by when each step actually needs to happen.
Download the checklist here
Year-end payroll checklist at a glance
Verify employee data and reconcile payroll by mid-December. Run your final 2026 payroll by December 31. File W-2s, W-3, 1099-NECs, Form 940, and Q4 Form 941 by February 1, 2027. Update 2027 tax tables, SUTA rates, and minimum wages in January. Applicable large employers also furnish Form 1095-C by March 2 and e-file by March 31.
2026 year-end payroll deadlines
January 31, 2027 falls on a Sunday, so February 1 deadlines shift to the next business day.
Step 1: Prep and verify (now through mid-December)
This is the stage that saves you the most headaches, and it’s the one most businesses skip.
✔️Verify employee information. Names and Social Security numbers should match each employee’s Social Security card exactly. A mismatch is one of the most common reasons W-2s get kicked back. Confirm mailing addresses too, especially for anyone who moved this year.
✔️Reconcile payroll. Match your year-to-date payroll registers to your general ledger and to your Q1 through Q3 Form 941 filings. If the numbers don’t tie out now, they won’t tie out in January either.
✔️Capture taxable fringe benefits. Personal use of a company vehicle, gift cards, group-term life insurance over $50,000, and similar perks all count as taxable wages. Get them on the books before the final payroll runs.
✔️Check benefit limits. Make sure 401(k), HSA, and FSA contributions stay within annual limits. An overage caught in December is a payroll adjustment. Caught in April, it’s a much bigger conversation.
✔️Invite W-4 updates. Remind employees to review withholding for next year, especially anyone who married, divorced, had a baby, or picked up a second job.
✔️Review worker classification. Confirm who’s an employee and who’s a contractor, and collect a W-9 from every contractor you’ll issue a 1099 to. Chasing W-9s in late January is nobody’s idea of a good time.
✔️Record special pay. Third-party sick pay, S-corp 2% shareholder health premiums, and dependent care benefits all need to be reported correctly. They’re easy to miss because they often don’t flow through regular payroll.
✔️Review PTO balances. Apply your carryover, use-it-or-lose-it, or payout policy, and check any state rules on unused time.
Step 2: Run your final 2026 payroll (late December)
✔️Plan around the holidays. Bank and processing cutoffs move around Christmas and New Year’s. Confirm yours early so pay lands on time.
✔️Pay bonuses and commissions. If they should count as 2026 wages, include them, along with any fringe benefit adjustments, in your last 2026 check date.
✔️Confirm tax deposits. Make sure every federal and state deposit for the year was made on schedule. A missed deposit is far easier to address before you file than after.
✔️Save your year-end reports. Export final registers and tax summaries before any system rollover. Once your payroll system flips to 2027, pulling clean 2026 reports can get complicated.
Step 3: File and distribute W-2s, 1099s, and returns (due February 1, 2027)
✔️Give employees their W-2s. Deliver by mail, in person, or electronically if the employee has consented to electronic delivery.
✔️File W-2 Copy A and W-3. Submit to the Social Security Administration, electronically through SSA Business Services Online or on paper.
✔️Send and file 1099-NECs. Furnish them to contractors and file Form 1099-NEC with the IRS, including Form 1096 if filing on paper. If you file 10 or more information returns in total, the IRS requires electronic filing.
✔️File your Q4 Form 941. Or your annual Form 944, if that’s what the IRS assigned. See the IRS guidance on Form 941.
✔️File Form 940 for FUTA. If you owe a balance over $500, deposit it with the return.
✔️Handle state filings. Annual withholding reconciliations and Q4 unemployment reports are due too, and due dates vary by state. If you have employees in more than one state, map each one separately.
Step 4: Set up payroll for 2027 (January)
Closing out 2026 is only half the job. The other half is making sure 2027 starts on the right numbers.
✔️Update tax tables. Enter the 2027 Social Security wage base and the new retirement plan and HSA limits.
✔️Enter new SUTA rates. Apply updated state unemployment rates as the notices arrive. They don’t all come at once.
✔️Check minimum wage changes. Many state and local increases take effect January 1. If you operate in multiple locations, check each one.
✔️Renew exempt W-4s. Employees claiming exemption must submit a new W-4 by February 15.
✔️Publish your 2027 payroll calendar. Share pay dates, holidays, and processing deadlines with managers and employees.
✔️Reset accruals. Roll over or reset PTO balances according to policy. If you track time manually, this is a good moment to look at time and attendance
Step 5: ACA reporting for applicable large employers
If you had 50 or more full-time employees, including full-time equivalents, you’re an applicable large employer (ALE) with additional forms to file:
✔️March 2, 2027: Furnish Form 1095-C to employees.
✔️March 1, 2027 (paper) or March 31, 2027 (electronic): File Forms 1094-C and 1095-C with the IRS.
If you’re hovering around the 50-employee line, especially with seasonal or temporary staff, double-check your count. ALE status is easy to assume and expensive to get wrong. Our benefits administration team can help you confirm it.
Step 6: Keep the right records
✔️Archive your 2026 records. Keep payroll tax records for at least four years after filing.
✔️Store your filing confirmations. Save IRS, SSA, and state acknowledgments together with this checklist so everything is in one place if a question comes up.
Download and print your year-end checklist here.
Year-end payroll FAQs
When are W-2s due in 2027?
W-2s for tax year 2026 are due February 1, 2027. That deadline applies to both furnishing copies to employees and filing Copy A with the W-3 at the Social Security Administration.
When is Form 1099-NEC due for 2026?
Form 1099-NEC is due February 1, 2027, both to contractors and to the IRS. Businesses filing 10 or more information returns in total must file electronically.
What is the 1095-C deadline for 2027?
Applicable large employers must furnish Form 1095-C to employees by March 2, 2027. Forms 1094-C and 1095-C must be filed with the IRS by March 1, 2027 on paper or March 31, 2027 electronically.
Who counts as an applicable large employer?
An applicable large employer is a business that averaged 50 or more full-time employees, including full-time equivalents, during the prior calendar year. ALEs are subject to ACA employer reporting on Forms 1094-C and 1095-C.
How long should I keep payroll records?
Keep payroll tax records for at least four years after the tax is due or paid, whichever is later. Store IRS, SSA, and state filing confirmations with them.
What if an employee claimed exempt on their W-4?
An exempt W-4 expires each year. The employee must submit a new W-4 by February 15, 2027 to keep exempt status. If they don’t, you generally begin withholding based on their last valid W-4, or as single with no adjustments if there isn’t one.
When is the last payroll of 2026?
Your final 2026 pay date should fall on or before December 31, 2026. Any bonuses, commissions, or fringe benefit adjustments you want counted as 2026 wages must be included in that payroll.
Year-end payroll doesn’t have to be a fire drill
For most businesses, year-end payroll lands right on top of the busiest stretch of the year: holiday schedules, year-end production pushes, budget season. That’s exactly when a missed deposit or a batch of incorrect W-2s does the most damage. It pulls your office manager or HR lead away from running the business and into cleanup mode. If manual admin is already eating your team’s week, we broke down how to reduce manual HR admin in 7 easy steps.
Where we help: HireLevel’s payroll services handle payroll processing, tax filings, W-2s, and ACA reporting so you can focus on growing your business. Pair payroll with benefits administration and time and attendance, and the data behind every year-end form stays in one place all year long, not just in December.
General guidance only, not tax or legal advice. Dates reflect 2026 filings due in 2027, shifted to the next business day where they fall on a weekend. Confirm state requirements with your advisor.
