The Small Business Payroll Year-End Checklist (Canada)

Payroll year-end has a way of making even the most fearless small business owners feel like castaways, adrift in a sea of payroll paperwork with the Canada Revenue Agency (CRA) looming on the horizon. It’s like being stuck on an island, Tom Hanks-style—frazzled, isolated, and just waiting for a volleyball named Wilson to show up for moral support.

But year-end doesn’t have to feel like a survival mission. With a solid plan, a bit of preparation, and the right tools, you can tackle the paperwork, avoid penalties, and set your business up for a smooth year ahead. 

Your checklist for Canadian small business payroll year-end

This small business payroll year-end checklist will guide you through the key steps for ensuring your tax form filings are accurate, timely, and stress-free. While the items are laid out in an ideal order to streamline year-end processes, you can tackle them in any sequence that works best for your business. 

Prepare for year-end processing

The first step to a successful year-end is getting all your ducks in a row. Create a 2024 payroll year-end reference folder on your computer for recordkeeping, and begin by asking yourself the following questions.

1. Which forms do you need to file this year?

Generally speaking, you’ll file T4 forms for employees and T4A forms for contractors to report their income and payroll taxes to the CRA. If you’re a Québec employer, you’ll also need to file RL-1 slips to report this information to Revenu Québec (RQ). Visit the Canadian Small Business Employer’s Guide to T4s, T4As and RL-1s to learn more. 

2024 T4 slip: Statement of Remuneration Paid

2. Have tax forms been updated for 2024?

Tax forms can change from year to year, so it’s important to do your research and understand any updates. Check the CRA website or relevant provincial tax authority sites for the latest changes. 

For example, for 2024, two new boxes—16A and 17A —have been added to T4 slips to capture additional pension contributions. Additionally, new T4 box codes have been introduced, including Code 94 (Indian Act exempt employment income – RPP contributions) and Code 95 (Indian Act exempt employment income – Union dues). Staying on top of tax form updates will help you complete your filings correctly and avoid errors.

“As of January 1, 2024, the CRA requires organizations filing more than five tax slips to do so electronically. Previously, the threshold was 50 slips. Failing to comply with the new rule could result in penalties—be sure to double-check your filing method before submitting.”

– Samantha Derocher, Payroll Compliance Lead, Wagepoint

3. How will you submit your year-end filings?

You have two options for submitting your tax forms: manually or electronically. 

Filing manually requires extra time to account for processing delays and potential errors. If you’re submitting by hand, make sure all forms are completed accurately and mailed to the correct address well before the deadline to avoid late penalties.

If you’re using payroll software, like Wagepoint, ensure your team can access their employee portals to easily view and download their year-end documents. Submitting electronically can streamline the process, improve accuracy, and save you valuable time.

4. Do you need to process any pay runs early?

Holiday bank closures for Christmas, Boxing Day, and New Year’s Day might require you to process payroll earlier than usual to ensure your team gets paid on time.

You should also keep track of other important deadlines, like the last date to process a direct deposit or manual payroll with a 2024 pay date, as well as the cutoff for running bonus pay runs if you plan to issue year-end bonuses before 2025.

Add these key dates and tasks to your business calendar to stay organized and avoid any last-minute surprises.

“Be mindful of which pay date you choose for any final runs of 2024 that need to be reported on 2024 tax forms. Pay dates that fall within the calendar year determine the tax year for reporting; earnings are reported based on when they are paid, not when they are earned.”

– Robin Jones, Payroll Support Manager, Wagepoint

Verify your business information

There’s a lot of information to review as a part of your year-end payroll processes, but it all starts with something super simple: your company details. Take a moment to verify: 

• Company name and address 
• CRA/RQ Business Number and Payroll Account Number 
• CRA/RQ threshold frequency for your tax remittance schedule 
• Your account numbers and rates for Workers’ Compensation (WSIB/WCB), Employer Health Tax (EHT), and other provincial/territorial taxes

Verify your employee and contractor information

An error as small as a misspelled first name can lead to headaches at year-end, so make sure that your Anna’s aren’t entered as Hanna’s. Check the following information for both active and terminated employees (they will need year-end statements, too):

• Full names (first and last)
• Social Insurance Numbers (SINs) or business numbers (for contractors)
  • Look out for temporary SINs that begin with a 9 as they can expire
• Current addresses
• Dates of birth
• Tax status and exemption changes, including whether their TD1 form is up to date

Remember to confirm that everyone is classified correctly as an employee or contractor—misclassification can lead to penalties. 

Confirm year-to-date (YTD) amounts are correct

Your YTD reports are the highlight reel of your payroll year, spanning from January 1 to December 31. Just like watching a season recap of your favourite show, reviewing your YTD amounts helps you catch anything you might have missed and ensures you’re ready for the next steps. It’s the easiest way to get a snapshot of your year-end data and spot any potential issues. Here’s what to check:

• Gross earnings 
• Canada Pension Plan (CPP) and Employment Insurance (EI) amounts
• Federal and provincial/territorial income tax amounts
• Vacation 
  • Verify accrued vacation amounts to make sure that they match up to what they should be for your employees. 
  • Ensure that any time taken as vacation time was reported and deducted from each employee’s balances. 
• All incomes and deductions 

“Don’t wait until December to start thinking about year-end. Conducting regular payroll audits during the year will enhance operational efficiencies for your business and help to protect your organization from complications during year-end.”

– Nancy Wilman, Product Support Manager, Wagepoint

Reconcile your payroll bank account for outstanding entries

Reconciling your payroll bank account means reviewing all payroll-related transactions to ensure they match what’s recorded in your system. This includes identifying any outstanding entries, like uncashed paycheques, or corrections that need to be made. Reconciling helps you catch discrepancies early, prevents errors on your year-end forms, and ensures your financial records are accurate—that’s a pretty great hat trick!

Watch out for these types of outstanding entries: 

• Manual cheques that haven’t been cashed yet
• Void or cancelled cheques that still appear in your records
• Stale-dated cheques that are past their cashing period

Balance your payroll tax account

You’ll also want to ensure that the amounts you’ve remitted to the CRA or RQ match the totals in your payroll reports. Taking a few minutes to reconcile these numbers ensures everything is accurate and ready to report, so you can confidently close out the year. Compare your tax remittances against: 

• The Payroll Register Report
• The Receiver General Report
• The PD7A form, which summarizes EI premiums, CPP contributions, and federal income tax withheld from your employees’ pay. 

Some common reasons you might find discrepancies include errors in your YTD amounts, running off-cycle payrolls, an incorrect exemption status, or an incorrect date of birth. 

Review CPP and EI amounts and remit anything outstanding

If you’re like most small business owners, you’d rather step on a thousand Legos, barefoot, than get a single Pensionable and Insurable Earnings Review (PIER) from the CRA. PIERs are costly and time-consuming, potentially leading to penalties and a lot of extra paperwork. One of the best ways to PIER-proof your year-end is to ensure that your CPP/Québec Pension Plan (QPP), EI, and Québec Parental Insurance Plan (QPIP) contributions are accurate and fully remitted. Here’s how: 

• Verify deductions: Check each employee’s CPP/QPP and EI deductions for accuracy, and confirm employer portions match.
• Identify exemptions: Ensure no deductions were made for exempt employees (for example, employees under 18, over 70, or those who opted out of CPP with Form CPT30).
• Remit unpaid contributions: Submit any outstanding CPP/QPP, EI, or QPIP amounts for the current calendar year.

“Ensure that your taxable benefits are configured properly. Think about which benefits are pensionable, insurable, and/or taxable. Take special note of CPP when there are pay frequency changes during the year, extra paycheques issued, or if any employees have turned 65/70 or 18 during the year.”

– Kelly Loewen, Partner Onboarding Lead

Review year-end forms and summaries before submitting

Now that you’ve crossed your Ts and dotted your Is by following the steps above, all that’s left is a final review. Double-check your completed T4s, T4As, RL-1s, and summary reports to make sure everything’s in order before submitting them to the CRA or RQ.

Plan for the year ahead

With year-end behind you (happy dance), kick the upcoming year off on the right foot with these steps: 

• Know when your first payroll of the new year is. 
• Check with your payroll provider to find out when the new federal and provincial tax rates apply and who is responsible for updating them. For example, Wagepoint will update the tax tables for 2025 on December 27, 2024. 
• Make any changes to your federal, provincial, and territorial remittance schedules. 
• Update employee tax profiles, if they have changed from 2024 (use a TD1 form). 
• Make sure your payroll deposit frequency is correct for the new year.
• Update employer-paid premiums like EHT/HSF and Workers’ Compensation.
• Carry forward balances for things like vacation accruals, overtime, unused sick days, loans, or garnishment balances.
• Make note of statutory holidays and bank holidays so you can stay on track with processing payroll and paying employees on time.
• Create 2025 payroll year-end folders. (This one is going to feel goood!) 

Win year-end by processing with Wagepoint

Want to experience a year-end that feels like thriving, not surviving? Get started with Wagepoint today! Our simple online payroll software helps take care of year-end procedures like filings and remittances and includes a built-in year-end checklist to keep you on track. Try Wagepoint free for 14 days to see how easy the year-end can be.

Written by Kasia Wind

Kasia Wind is a Strategic Communications and Projects Manager at Wagepoint. As a kid, she wanted to become a talk show host like Jenny Jones (it didn't work out). A believer that storytelling is the best way to connect, Kasia has created content for audiences including small businesses, bodybuilders and doctors. Oddly, her own stories often involve getting injured in hilarious ways.

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