SAP US Payroll Year End Preparation Checklist

SAP US Payroll Year End Preparation Checklist:

This Wiki represents the various activities that need to be performed for the US payroll year end.


The purpose of this page is to present the list of activities that need to be performed during the US payroll year end.


The Year end Preparation is a joint effort by the Business and the SAP IT team.List represents an overview of activities to be performed by each on of them.

The main things to keep in mind are: Year-end payroll and tax filing schedule, calendar extends correctly into the next year, user training for 221(payroll adjustment), tax configuration for upcoming year, etc.

Roles and Responsibilities


  • Update your SAP payroll calendar and check dates for the upcoming year.
  • Update Federal IRS Garnishment Levy (Publication 1494) information in SAP.  This will be delivered in an OSS note or you can make the changes manually.
  • Update SAP for all changes affecting Year End Tax reporting.
  • Update any deduction and payment models.
  • Update posting dates for upcoming year.
  • Update all dates associated with month end accruals for upcoming year.
  • Install required HR Support Packages (HRSPs), up to and including the Year End Base depending on your release of SAP.
  • Review all the key OSS notes to see if they need to be applied based on your business requirements.

Payroll Business

  • Clear all outstanding claims prior to last payroll of the year.
  • Review uncollected taxes (/Nxx wagetypes) and take required steps, if desired, to resolve them.
  • Update any company specific state unemployment rates and wage base for upcoming year.
  • Review W-4 exemptions and W-5’s.
  • Review reconciliations between GL and Payroll to make sure tax accounts are in balance.
  • Make sure you keep current on any SAP and BSI TUBS that have key changes for upcoming year.

The Year end checklist

The following checklist presents the list of activities to be performed and a timeline of milestones that we need to observe for Year End payroll processing for US payroll.

During November, we can plan to complete the following milestones if they have not already been completed earlier in the year:

  • Refresh your test client with all current Master Data and Customizing found in your production client.
  • Install all required HR Support Packages (HRSPs), up to and including the Year End Base HRSP defined for your release.
  • Apply Year End Transports (or equivalent HRSPs) when necessary.
  • Entering  Year  End Adjustments.  To this  avoid  undesired claims from being stored in your system, identify a time window when FICA-taxable adjustments can be entered before the final payroll run of the year.
  • Reminding employees to update their mailing address, W-4 or EIC W-5 data, and any W-2 contact information.
  • Performing and auditing Tax Reporter simulation runs.
  • Performing Payroll Reconciliations.Performing and auditing Tax Reporter production run.
  • Printing results from Tax Reporter production run.

Before performing your final payroll run of the year, please follow the following:

  • Apply Year End Transports (or equivalent HRSPs) when necessary.
  • Review the configuration information of the Tax Reporter and complete Tax Reporter configuration for the following items:
    • W-2 boxes 11 through 14
    • Company information, blocking factor, download format for data files
    • Features UTXTM, UTXRP, UTXPR and UTXJS
  • Before running your first payroll run of the New Year, identify and clear all existing claims from the current tax year.
  • Perform W-2 simulation runs for small employee groups.
  • Use the Payroll Reconciliation Report to compare payroll results with simulated Tax Reporter data.
  • Apply all applicable Tax Update Bulletins (TUBs) for BSI TaxFactory.
  • Perform test runs of the full W-2 production process.
    • If using a test client with a copy of production data, consider performing a production Tax Reporter run in the test client.
    • Estimate the necessary Tax Reporter runtime on the production server.
    • Ensure that no system time-outs occur.
    • Print some W-2s to confirm printer setup, authorizations, and alignment.

Simulate and perform your first payroll run for the new year.

  • Identify and process all prior-year adjustments.
  • Perform Tax Reporter simulation runs.
  • Use the Payroll Reconciliation Report to verify the accuracy of your simulation run results.
  • Perform any necessary Tax Reporter configuration changes.
  • Perform your Tax Reporter production run and validate the outputs.
  • Print and distribute all year-end tax report forms.
    • Inform the SAP Year End Support team that you have successfully completed W-2 Production.
    • File year-end forms with federal, state and local tax authorities.
    • Issue and file any last-minute correction year-end forms.

Test W-2 Post-Filing Run functionality in the following areas

§         W-2 Post Filing

§         Corrections

§         Reprints

§         Reissues

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