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Payroll year end checklist: Here’s what your business needs to do

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Payroll year end doesn't have to be stressful for your business

Payroll year end is approaching soon but there’s no reason to panic. If you’ve not put plans in to place to prepare for it, there’s time to get your payroll team ready for it. 

There are a number of things you need to do for a successful payroll year end but the key things to remember are that you must report to HMRC on the previous tax year – and the submission date is 19 April. 

You then need to prepare for the new tax year and make sure you give your employees their P60s by the end of May. 

To help you with payroll year end, here are a few steps you need to take and key dates to be aware of, so you can make sure you do everything that is required and you stay on top of your payroll.

Payroll year end things to do

1. Get your P60s ready

All your employees who are working with you on the final day of the tax year, on 5 April, need to receive a P60 from you by 31 May.

This important document summarises their pay and deductions for the year.

Using your payroll software, you can generate your P60s and securely share them online with your employees. There’s also the option to print them off if you need to.

2. Check when your payroll ends

Does your payroll end on week 52 or do you have a week 53 (if the pay date falls on 5 April 2021) to take into consideration? Not sure? 

If your employees are paid monthly, you won’t have a week 53, so you can process your payroll as normal. 

If some (or all) of your employees are paid on a weekly, fortnightly or four weekly basis, if your normal pay date doesn’t fall on 5 April, you don’t have a week 53. 

However, if those weekly, fortnightly or four weekly payments mean your normal pay date does fall on 5 April, then you do have a week 53. 

In this case, all you need to do is complete your payroll for 5 April in the usual way before processing your year end. 

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3. Check for leavers

Have any of your employees left your business? If so, you need to process them as leavers.

It’s important that you do this before submitting your Full Payment Submission (FPS) and Employer Payment Summary (EPS). 

4. Send your final FPS of the year

So, you’ve worked out whether you have a week 53, processed the final payroll of the tax year and have made any of your employees’ leavers. Now you can send your final FPS and, if required, EPS. 

As part of the preparation, you would process your final pay period and submit your last FPS – but just for your final pay period.

When you process your year end, you’ll do an internet submission. The deadline for this is 19 April. 

There’s no difference to the FPS and EPS in the final pay period. Submit them as normal, you can then proceed with the payroll year end process. 

5. Process your year end

Using your payroll software, make sure you check your processing date – this needs to be set for 5 April. Now you can process your year end and make your final submission for the 2020/21 tax year. 

Once this step is complete, you can produce your P60s. Remember, your employees need to receive them by 31 May. 

And that’s it – you’ve completed the payroll year end process for another year. Put your feet up for five minutes – then get ready to start processing payroll for the new tax year. 

Payroll year end dates to be aware of

Some of the key dates around payroll year end have been highlighted above but here they are again along with some other payroll dates that you need to be aware of.

It’s worth adding these to your calendar (if you haven’t got them in there already):

5 April

  • The 2020/21 tax year ends on this date

6 April

  • The new tax year (2021/22) begins

From 6 April

  • Update your employee payroll records
  • Time to update your payroll software

19 April

  • This is the deadline for the final submission of the 2020/21 tax year

By 31 May

  • Your employees need to receive their P60s

By 6 July

  • You need to report on expenses and benefits – you can use your payroll software to do this

6 July

  • This is the deadline to submit your P11D and P11D(b) forms

19 July

  • On this date, payment of class 1A National Insurance contributions must be with HMRC

Final thoughts on payroll year end

See, payroll year end doesn’t need to be stressful. With a bit of forward planning, you can get your processing done with ease before you put preparations in place for the new tax year. 

Are you in the process of preparing for payroll year end? Let us know how you are getting on with it in the comments below. 

Editor’s note: This post was originally published in March 2018 and has been updated for relevance.

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Comments (59)

  • I have completed my year end and there was a message at the end telling me to install updates after completion and before processing month 1, how do I do this as I can not find any way, I thought we had an email sent from Sage during the year end time with a link to install ?

  • 1. An employee who left 2 weeks into the tax year 2020/2021, he left on 17 April 2020. He appeared on my list of employees when I was processing the year end for 2020/2021, but when it went to print the P60’s his was not printed. I realise perhaps by issuing him with a P45 all the information was on that, but I thought it is a legal requirement for him to have a P60 even if it was for 2 weeks worked in the tax year 2020. Please can someone advise if I need to re-run the payroll as perhaps there is an error somewhere.

    2. In all the sage payroll videos for 2021 it does not now show you to back up to archive as it did in previous years and it is only after I completed the 2020/2021 year end I realised that whilst I just backed up in the Sage year end as one does normally when doing a payroll it did not seem to recommend to archive it. Can I go back in and archive it to my hard drive or after it has processed is that now not possible.
    Many thanks.

  • It really is so easy to complete the year end process for payroll and your instructions are very easy to follow so thank you. I do have one question and that is, do we have to print off any reports as part of the year end process?

  • Are the tax code changing from April 2021

  • my month 12 payroll was a run on 25th March and I submitted an FPS as per normal. Do I need to do another one before the 19th April?

  • Please advise. we pay everyone monthly so I ran the payroll at the end of March and submitted it to HMRC as normal. do I still have to submit to HMRC before 19th April if I did it end of March?
    One chap left us on 5th April 2021 but hasnt been paid yet-due end of April for his last wages from us for the few days in April. Does this make a difference please?

  • My Month 12 payroll was up to 26.03.2021 but I have leavers between this date and the 05.04.2021.

    Do I process them as a leaver after running year end? I can’t work out how to do their final pay without going into the next payroll year.

    Thanks
    Rebecca

  • Can you do new tax code changes for 2021/2022 before payroll year end?
    Also, do you remove all week 1 / month 1 from all employees that have for the new tax year?

  • Hi

    Cam you please confirm the changes I need to include to the new tax year 2021/22 after completing the year end 2020/21?

    For example the “Global changes” on the tax code for wk1 basis?

    Kind regards

    Osman
    Chartwell Press

  • My Month 12 payroll was up to 25.03.2021 but I have leavers between this date and the 05.04.2021.

    What date would I process the leavers?
    Thank you Sam