Looking Ahead: Get Your HR Ready for 2025 and Beyond

For many companies, early fall is the time to start wrapping up any important end-of-year tasks and plan for what’s ahead in the new year. At TriNet, we call this transitionary period “Year-End/Year-Start.” During this time, business leaders and HR professionals should be working through critical items like preparing for accurate payroll taxes and Form W-2s. Not only is it a busy time of the year for us and our customers—but for all SMBs. To help you stay on track, we’ve highlighted some things to keep in mind.

Preparing for Year-End

First, it’s important to carve out time and review payroll items for this tax year. Some of the most critical items include:

• Correcting employee wage over- or under-payments,  
• Reporting all fringe benefits and imputed income, 
• Capturing and reporting year-end bonus and commission information, 
• Reviewing next year’s federal tax rates and limits, and applicable federal, state, and local minimum wage and salary bases, to see if there have been any changes, and 
• Reporting equity transactions and nonqualified deferred compensation, if applicable. 

Reviewing these details is essential to ensuring accurate wage reporting and payroll taxes. 

Next, to make sure your employees receive accurate Form W-2s, it’s important to report, if applicable, employer-sponsored health coverage required under the Affordable Care Act (ACA). If you are unsure whether this applies to your business, visit the IRS website. It contains information specific to employers, including a page on how to determine the size of your workforce and what that means under the ACA.  

Other items to consider as you close out the year and look ahead to 2025: 

• Although statutory and regulatory changes happen throughout the year, we typically see a high number of changes that take effect on January 1. Review the state, city, and local statutory and regulatory information where your employees work to see if any changes take effect January 1. Then, adjust policies, procedures or other items to help make sure you remain in compliance. 
• Review and make any necessary changes to your 2025 company holiday schedule. And be sure to communicate those changes to your employees so they know what to expect in the coming year.
• Encourage employees to review their 401(k) contribution elections prior to January 1, 2025. 

It’s also a good idea to revisit your company’s policies and procedures as you approach the new year. This includes items such as employee handbooks and any standalone policies like time off policies and expense policies. If changes need to be made, give your employees notice and communicate the updates so they are aware going into 2025.

As busy as you might be with all of the year-end tasks, remember that your employees matter. Take time to consider how you can show your appreciation for the contributions they’ve made throughout the year, whether that be through a year-end party or a handwritten note. Recognizing their efforts is an important step and should not be forgotten. 

Preparing for Year-Start

As you prepare to flip the page on a new calendar year, review your employees’ time-off requests to ensure that any requests that were submitted for 2024 are approved before your last payroll of the year is processed. This will help you avoid any last-minute payroll complications and make sure you close out 2024 with accurate time-off balances for your employees.

If you happen to be in the situation where your pay period includes both 2024 and 2025 dates, be sure that you are allocating the time-off hours taken to the correct year. If this is overlooked, it can have an impact on your employees’ time-off balances and your company’s books.

If any of your employees claimed an exemption from income tax withholding in 2024, they need to renew their exemption by February 14, 2025. This can help prevent any unexpected tax surprises and keep things running smoothly for everyone.

If you run a larger food or beverage company, there's a specific task to consider—you may be required to report tip allocations. This is a compliance matter that's vital for your business, so check the rules and regulations in your region to ensure you are compliant.

Additional items to review in January include federal tax rates and limits. Updates typically take effect then, and it’s critical to keep an eye out for any updates that may impact your business. Taking care of these essential tasks will set the stage for a successful and organized year ahead.

© 2024 TriNet Group, Inc. All rights reserved. This communication is for informational purposes only, is not legal, tax or accounting advice, and is not an offer to sell, buy or procure insurance. TriNet is the single-employer sponsor of all its benefit plans, which does not include voluntary benefits that are not ERISA-covered group health insurance plans and enrollment is voluntary. Official plan documents always control and TriNet reserves the right to amend the benefit plans or change the offerings and deadlines.

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