This document provides guidance on conducting year-end tasks and processing fringe benefits in payroll. It recommends starting the year-end process early, validating transactional data for accuracy, and securing data by closing out the old year and initializing the new year. It also describes how to record fringe benefits by creating custom pay codes, timecard entries, and adjustments to increase taxable wages without generating a positive paycheck amount. The goal is to accurately report fringe benefits on W-2s while ensuring paychecks have a net of $0.00.

1. Cramming for Finals:
A Year-End Study Guide
Presented by: Andrew Bach

2. Year End Process

3. The Year End Process
• Operational Tips
• Have one person or small team coordinate the year end effort
• Coordinate with various departments as needed.
• Know your deadlines
• Start Early

4. The Year End Process
• Validate Transactional Data
• Secure Data
• Employee W-2s
• Employer Forms and Electronic W-2 files

5. Year Worksheet List

6. Year End
Worksheet

7. Validate Transactional Data
• Data Integrity Check

8. Data Integrity Check
• Three Categories
• Correctable by
User (Blue)
• TempWorks
Support
Assistance (Red)
• Warning:
Verification
(Purple)

9. Data Integrity Check
• Correctable by User (Blue)
• Most Common
• Missing Address Details – Important to have correct so that employee receives W-2.
• Missing Employee SSN
• Missing Employer Tax IDs
• Warning: Verification (Purple)
• Most Common
• Adjustment W-2 Box and Labels – Important to verify these are correct to ensure
accurate W-2 forms. Tempworks does not advise on which box/label is correct.
• Box 12 and Box 14 are most common, review specifics in W2 instructions:
https://www.irs.gov/instructions/iw2w3

10. Preparing for Year End tips
• Run Data Integrity Check at least every Quarter
• Catch problems sooner
• Avoid being up against a deadline
• Watch for Year End email in November
• Schedule review calls earlier than later

11. Finish Data Integrity Check
Click Check Finished

12. Secure Data and Initialize the New Year
• Closes old year and starts New Year
• All Check data is saved to Year End specific Tables
• Actual Year Close

13. Employee W-2s
• Step 3 – Verification necessary before printing.
• Step 4 – You can download w-2 file data for your records.

14. Employer Forms and Electronic W-2 files
• Tempworks Enterprise generates the data and forms
• Tempworks does not file your employer tax forms or
Electronic W-2 files (mag media).
• Exception: Tax Processing Customers

15. Year Closed
• This is a check box is to record you have completed all the
other steps.

16. Fringe Benefits

17. Fringe Benefits (Imputed Income)
• Adds to the employee’s Gross (taxable) income, but is not
included in the net since the benefit is received in another form,
may be excluded from certain taxes
• Examples
• Personal Use of Company Car
• Term Life Insurance (benefit amount over $50k)
• 3rd Party Disability Payments
• S-Corp Income Distributions
• Review IRS Publication 15-B for full list and details
• https://www.irs.gov/publications/p15b

18. Recording Fringe Benefits
• Goal is to increase the Employee’s Gross Wages for
applicable tax jurisdiction, but not generate a positive
value check.
• A custom Pay Code for each type of Fringe Benefit
• A corresponding Time Card Adjusment

19. The Process
• Create a timecard
• Change Pay Code
• Enter 1 Unit with Unit Pay amount for Benefit Amount
• Add a Timecard adjustment with a negative amount to make
the net of the check $0.00
• You may need to adjust this after staging the check to make the net
exactly $0.00

22. Custom Pay Code
• TempWorks Support can add these for you
• This is what determines the W-2 box and label.
• Allows for specific tracking and reporting.
• Allows for custom tax treatment.
• A pay code can be set up to be exempt from certain taxes.
This means wages under this pay code will not add the
Taxable wages for that tax. (Different from just setting the
amount of tax on the check to $0.00.)

23. Getting the Net to zero
• Taxes can be adjusted to 0.00 on the staged check
• This will increase the taxable wages, but will not increase the
taxes withheld.
Wages
Tax
withheld

24. Negating Adjustments
• Can be set up in Administration
• Match the Name of Adjustment to the Pay code
• No W2 Box needed, that is handled by the Pay Code.
• Timecard adjustments, not employee adjustments
• Category: Unbillable Expense

25. Getting the Net to zero
Quick Tip
Using the Overrides Tab, you can set the Federal and
State taxes to withhold $0.00 pre-emptively.

26. Getting the Net to zero
• Some Employee Taxes have to be collected
• Example: Medicare
• Since the employee is not actually being paid, your
company will pay this portion when you file even though no
actual wages were collected from the employee.
• If you wish to recoup this from the employee, an adjustment
can be created on the employee’s profile.

27. Getting the Net to zero

28. • Payroll error notifying
that net of check is
negative

30. • Take note of
the negative
net pay amount
after adjusting
employee
taxes.

31. • Adjust the amount of
the Adjustment based
on the amount the
staged check was
negative. In this case
(-$1,000) – (-$76.50)
gives use (-923.50)

32. • Now when the
taxes are zeroed,
the check’s Net
is zero.

33. • The payroll error
can be approved
and the $0.00
check can be
processed.

34. Questions?