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US Payroll and Year End Tips

by Jarret Pazahanick

September 15, 2010

As another year-end is closely approaching it is very important for SAP Payroll customers in the United States to get prepared for the coming year-end as well as the start of the upcoming year.

We are very fortunate that the SAP payroll product management shares a lot of information on the SAP Marketplace to keep customers up to date on relevant year-end OSS notes, documentation and FAQ’s.  This information is located at and I make a point to review it weekly during Q4/Q1 of each year.

Over the past 12 years I have seen several different outcomes as it relates to SAP payroll year-ends and the two biggest things to guarantee success is to start early and ensure you have an experienced team.

Every year SAP provides a year-end preparation checklist which is located at and Ihave listed some additional key items that that the SAP IT and Payroll Business team should review.

SAP IT Team 

  • 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 o r 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.

It is important that if you plan to bring on supplemental consulting resources that they have experience in US payroll, have been through multiple year-ends, and have strong troubleshooting skills. I have seen too many cases where clients realize once it is too late that their consultant does not have the skills they need and they end up having a lot of challenges.

I always recommend that clients take the time to call references as there are many people that claim to have this skill set and can’t even spell PU19 (lame SAP payroll joke). In addition at a bare minimum they should be able to walk you through the "how" regarding the key items listed above.

There is no reason why US Payroll customers should have any issues with the year end as if done properly it is not a difficult process. If you follow some of the advice above you will be well on your way to a successful year end.

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