Get your small business ready for the end of the year with Homebase

Editorial Team

6 min read
Woman looking through paperwork on desk

Staying on top of changing rules, regulations, and laws can be daunting for small business owners, especially when things are the busiest at the end of the year. We’ve teamed up with Homebase to share some helpful tips to help keep your business compliant.

There are three crucial things that small businesses need to stay on top of to prepare for the end of the year:

  1. End-of-year payroll checklist
  2. Updates to state laws and federal regulations
  3. Minimum wage increases

Taking care of these at the end of the year means you can start the new year knowing your business and team are set up for success. This doesn’t mean you have to spend New Year’s Eve buried under spreadsheets. Follow these steps to help make things easier, faster, and more accurate.

1. End-of-year payroll checklist

A little organization goes a long way with payroll. This checklist can help you close out your final payroll and prepare for the year ahead.

Gather your payroll tax forms

  • W-2: to report wages and withholdings to the IRS
  • W-3: summary of W-2 submitted to the SSA
  • 1099-NEC: Reports wages for independent contractors
  • 1096: Reporting non-employee compensation to the IRS
  • 940: Federal Unemployment Tax (FUTA) liability
  • 941: Quarterly report of collected employee payroll taxes (federal income, Social Security, Medicare)
  • 1095-B: Documentation of healthcare benefits if provided

Run year-end payroll reports

  • Payroll summary report from January 1 to December 31
  • Retirement contributions
  • Workers’ compensation (if applicable)
  • Employee summary reports: wages, deductions, tax withholdings for each employee or contractor
  • PTO report: review all paid-out PTO and remaining hours per employee

Verify employee information

  • Employee names
  • Social Security numbers
  • Updated addresses
  • Phone numbers

Confirm these numbers match your payroll information

  • Annual PTO accrual
  • Filing status (exempt or non-exempt)
  • Year-to-date wages and taxes
  • Pre-tax numbers
  • Worker status (active, terminated, or on leave)

Order W-2s for employees and 1099s for contractors from the IRS

  • This typically takes ten business days to arrive in the mail, so plan accordingly.

File and deliver W-2s and 1099s

  • All employers are legally required to provide employees with W-2s and 1099s for contractors by January 31st.

Submit tax forms 940, 941, and 944

  • These must be submitted by January 31st.

Keeping track of every form and detail for every employee can be overwhelming for small businesses. A full-service payroll provider like Homebase can make year-end prep much easier. Homebase helps simplify complex tasks, automate data entry, turn time clock entries into timesheets, and calculate breaks, overtime, and tax payments—all in one easy-to-use app.

2. Updates to state laws and federal regulations

The start of the new year brings changes at state and federal levels that affect all employers. For example, these are some of the changes announced in California for the year ahead.

California, effective January 1st, 2023

  • Companies with more than 15 employees will be required to list salary ranges for jobs and make that information available to existing employees. 
  • Companies with more than 15 employees will be required to provide pay scale information for all job postings internally and externally.
  • Companies with 100 or more employees will also be required to report detailed pay information to California’s Department of Fair Employment and Housing annually. Updated pay data reports will be due starting May 10, 2023. Companies could face fines of $100 per employee for failing to comply.

Paid Medical and Family Leave (PFML) changes

Changes to Paid Medical and Family Leave (PFML) were announced in multiple states. Here are some examples:

  • Colorado: Employees who meet the eligibility requirements will now be able to receive up to 12 weeks of paid family and medical leave funded through a payroll tax paid by both employers and employees in a 50/50 split when there are 10 or more employees.
  • New York: As of the new year, the list of family members for whom eligible workers can take Paid Family Leave to care will include siblings with serious health conditions. This includes biological siblings, adopted siblings, step-siblings, and half-siblings.
  • Oregon: The state will determine an employee’s eligibility when they apply. Paid Leave is funded by payroll contributions and is administered by the Oregon Employment Department. Employers do not pay the monetary benefits directly to employees. Eligible employees may take up to 12 weeks of Paid Leave per year for family, medical, or safe leave. Employees can take an additional two weeks for those who experience pregnancy or childbirth complications.

While it’s crucial to review the latest labor laws at year-end, know that changes can also happen throughout the year. Not staying informed can cost your business both time and money by having to deal with more paperwork and penalties. Modern tools like Homebase can help guide small businesses on compliance and ongoing changes at both state and federal levels. You can also talk to live certified HR advisors with Homebase to get useful templates, guides, training, and a full review of your policies.

3. Minimum wage increases

The following states have announced a minimum wage increase effective January 1, 2023:

Alaska: $10.85Maine: $13.80Montana: $9.95Rhode Island: $13.00
Arizona: $13.85Maryland: $13.25Nebraska: $10.50South Dakota: $10.80
California: $15.50Massachusetts: $15.00New Jersey: $14.13Vermont: $13.18
Colorado: $13.65Michigan: $10.10New Mexico: $12.00Virginia: $12.00
Delaware: $11.75Minnesota: $10.59New York: $14.20*Washington: $15.74
Illinois: $13.00Missouri: $12.00Ohio: $10.10

It’s important to keep an eye out for changes that happen later in the year if your state has yet to announce a wage increase. Wages increase can also be impacted by your jurisdiction, the number of employees you have, if your employees work on tips, or if you provide health insurance. Tools like Homebase can help you stay informed about wage changes and provide an all-in-one solution to manage your employee roster, documents, tips, hours, breaks, and overtime.

As your business grows, so does your to-do list. Simplifying team management with all-in-one tools like Homebase can save you time, stress, and money, so you can focus on running your business.

To learn more about using Homebase with Clover POS, watch this helpful video to get the ball rolling and review this help guide. Customer support can also answer any questions you may have via chat, email, or phone. 

*The increase applies to the Upstate minimum wage rate. The New York minimum wage varies by location and industry: $15 for employees in New York City, Long Island, and Westchester. Additional rates may apply under specific industry wage orders. Reference the 2023 Minimum Wage Report.

Important Disclaimer: Homebase is the sole and exclusive provider of services described in this article. Clover does not make any representations or guarantees as to these products / services.  Please see Homebase Terms & Conditions for more information.

This information is provided for informational purposes only and should not be construed as legal, financial, or tax advice. Readers should contact their attorneys, financial advisors, or tax professionals to obtain advice with respect to any particular matter.

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