Year-End Guide 2024
Here to make your life easier during Year End
FinCEN Reporting Requirements
The Corporate Transparency Act (CTA) requires ~97% of companies to report information about individuals with ownership and controlling stakes to FinCEN and notify the agency of any changes to the information as they occur.
The Time to File is Now
Nearly 30 million businesses will need to report BOI before the end of 2024. By filing now, you avoid the risk of $500+ per day penalties and even jail time. There are less than 55 days left before the filing deadline. Savvy business owners are acting now to avoid the year-end rush.
We Can Help
To ease your burdens with meeting this new reporting obligation, PayNW has partnered with Harbor Compliance. Harbor Compliance’s full-service support is the easiest way to put this filing requirement behind you.
Here is what you can expect:
- Each of your beneficial owners receives an online form to securely provide their information
- Harbor Compliance prepares and submits your filings to save you up to 3 hours per report
- Your data is centrally stored making updated reports a breeze
- Harbor Compliance handles up to four initial, updated, and corrected reports per year
Don't delay. Reach out now and put your BOI report on autopilot.
Reminder of Standard Payroll Processing Schedule
As a reminder, the standard payroll processing schedule is to submit payroll to us by 1:30PM PT, at least 2 business banking days prior to your check date. Payrolls submitted later are subject to rush processing fees. Please reach out to your Service Representative at support@paynw.com with questions.
Note: Cannabis-related Business (CRB) clients require 3 business banking days prior to check date.
Delivery and Holiday Schedule
HOLIDAY DELIVERY TIMES
PayNW now exclusively uses next-day delivery via FedEx. If you are concerned about the time of day in which your payroll delivers, particularly with the holidays, consider processing a day early.
We also have Paycard options in lieu of issuing paper checks for employees. Email your Service Representative at support@paynw.com if interested in learning more.
ELECTRONIC W-2 / 1099 /
1095-C DELIVERY
For employers who have chosen to enable Electronic Consent, employees may choose to receive their W-2s / 1099s / 1095-Cs electronically, in lieu of a paper copy by December 27th. To offer this feature to your employees, have them follow these easy self-service steps within the PayNW portal.
Employees who provide Electronic Consent may view and print their documents directly with Self Service, just as they would their pay statement today. If an employee enabled Electronic Consent previously, this is how they will receive any of their future W2/1099/1095C. PayNW will print and mail W-2s / 1099s directly to employees who do not provide electronic consent no later than January 31st.
PAYNW HOLIDAY SEASON SCHEDULE
PayNW will be closed to observe all Federal Holidays in 2024.
- Thanksgiving Day, November 28th
- Christmas Day, December 25th
PayNW will be closed to observe all Federal Holidays in 2025.
- New Year's Day, January 1st
- Martin Luther King Day, January 20th
- President's Day, February 17th
- Memorial Day, May 26th
- Juneteenth, June 19th
- Independence Day, July 4th
- Labor Day, September 2nd
- Indigenous Peoples' Day, October 13th
- Veterans' Day, November 11th
- Thanksgiving Day, November 27th
- Christmas Day, December 25th
PayNW Year-End Deadlines for Changes
PAYROLL ADJUSTMENTS AND SPECIAL ITEMS
The deadline for reporting fourth quarter and year-end payroll-related information and/or an adjustment is Friday, December 27, 2024. If adjustments are required after the deadline, we can reprocess your tax returns for an additional fee.
PAYROLL-RELATED POLICY CHANGES
Alterations to company policies that will affect 2025 payrolls should be submitted to your Service Representative at support@paynw.com 3 weeks prior to payroll processing. This will give our team time to set up and test the changes.
Changes may include but are not limited to:
- Pay Frequencies
- Time off / accrual policies
- 401(k) plan changes
BENEFIT RENEWALS
We request you send us your benefits information a minimum of 30 days prior to your open enrollment start date. This allows us to complete the configuration changes timely. Late submissions may incur additional fees.
IMPORTANT
For clients subscribed to EverythingBenefits Carrier Connection, please note that late submissions of Open Enrollment dates and changes may incur increased fees. EverythingBenefits cannot guarantee timely execution for late submissions.
Complete Prior to Last Payroll of the Year
REVIEW AND UPDATE ALL EMPLOYEE-RELATED INFORMATION FOR ACCURACY INCLUDING:
- Employee Social Security numbers, date of birth, and addresses
- Employee Name should be formatted to match their Social Security card
- Review/Update SOC codes assigned to employee profiles (for unemployment returns in AK, LA, SC, WA, and WV)
REPORT ANY REMAINING 2024 PAYROLL-RELATED INFORMATION AND/OR ADJUSTMENTS INCLUDING:
- In-house checks
- Voided checks
- Fringe benefits (S-Corp Insurance for owners, Personal Use of Company Car, Group Term Life in excess of $50K, etc.)
- Deferred Comp
- Short-term disability payments
REPORT THIRD-PARTY SICK PAY (DISABILITY PAYMENTS)
Insurance companies must notify you of any disability benefits paid to your employees in 2024 by January 15, 2025.
If you’ve been notified, contact your Service Representative at support@paynw.com by December 27, 2024.
If you receive the notification after your last payroll of the year, reach out to your Service Representative ASAP.
Please inform your insurance company that we will include third-party sick pay on the W-2 Forms we prepare.
Tax Registration Services Available
At PayNW, we're experts in payroll tax registration. We're fast and efficient, ensuring that your new states are registered as quickly as possible so you can start paying payroll taxes in compliance with state regulations and have confidence knowing that your registration will be done correctly and on time.
We'll handle the entire process for you, from registration to setup to tax processing, so you can focus on what you do best: running your business.
Email our service team at support@paynw.com or contact us to learn more.
Important Note: Don't forget, PayNW is committed to delivering exceptional service to facilitate the registration of your tax accounts. But it's important to note that the responsibility for ensuring timely compliance with payroll tax regulation lies with your company. Completion and submission of requested documents in a timely fashion, is imperative to avoid potential filing delays and penalties. Please be sure to review and adhere to any agency mandated tax deadlines to avoid any potential penalties and interest charges.
Important Tax Updates and Agency Notices for 2025
UI AND L&I RATE CHANGE NOTICES
State Unemployment and state workers' comp programs, including Washington Labor and Industries (L&I), will mail 2025 rate change notices starting this month directly to your business. Some agencies will notify you to obtain it online if they are only available electronically. Please forward them to your Service Representative at support@paynw.com to ensure proper calculation of your 2025 payroll taxes.
STATES WITH PAID FAMILY LEAVE
Paid Family and Medical Leave programs may also mail notices including eligibility status and premium changes for 2025. We need these letters to properly calculate your taxes and returns correctly in 2025. Please forward any notices to your Service Representative at support@paynw.com.
MISSING STATE AND LOCAL ACCOUNT IDs
PayNW has started emailing a report monthly with the last payroll of the month called “Applied For” to your Payroll Administrator. If you have any agencies that we still need the state or local ID number for, they will be listed on the attached report. Please be sure to provide us with these ID numbers no later than Friday December 20th, 2024. Any ID numbers received after this date will not be filed in a timely manner by PayNW and may result in late filings and/or penalties.
Important: PayNW will not collect, pay, or file for agencies with missing ID numbers
- All employee SSNs – many states will not accept quarterly state unemployment insurance (SUI) statements without SSNs
SECURE 2.0: SEC. 109 HIGHER CATCH-UP CONTRIBUTION LIMIT TO APPLY AT AGES 60-63
What are catch-up contributions?
A “catch-up contribution” is an extra amount that employees age 50+ can contribute to their retirement accounts in addition to the standard 402(g) contribution limit. The IRS determines the annual limit of catch-up contributions each year. Catch-up contributions may be made into 401(k), 403(b), 457(b) government and other certain retirement plans.
What are higher catch-up contributions?
SECURE 2.0 Sec. 109 expanded catch-up contributions to allow a higher limit or what many plan administrators are calling “super” catch-up contributions beginning in 2025. Super catch-up contributions provide an opportunity for a group of employees ages 60, 61, 62, and 63 to maximize their retirement savings by increasing the annual limit of catch-up contributions. A super catch-up contribution is not a different or separate contribution. It simply allows a higher catch-up limit for those allowed.
The increased limit of a super catch-up contribution is the greater of $10,000 or 150% of the regular catch-up contribution for the calendar year. The 2025 super catch-up contribution will be $11,250.00. The $10,000 will be adjusted annually beginning in 2026.
| 2025 Tax Year | 401k Contribution Limits | Catch-up Contribution Limit | Super Catch-up Contribution Limit |
| What is the amount? | $23,500.00 | $7,500.00 | $11,250.00 |
| Who is eligible? | All employees according to plan specifications | Employees aged 50-59 and 64+ | Employees aged 60-63 only |
401(k) limit increases to $23,500 for 2025, IRA limit remains $7,000 | Internal Revenue Service
2025 Mandatory Provisions
• Automatic enrollment in plans adopted after December 29, 2022.
• Increased catch-up contributions for employees age 60 to 63.
• Long-Term Part-Time (LTPT) employees working at least 500 hours per year for two years must be able to make employee contributions to retirement plans.
• Deferred to 2026: Catch-up contributions for high-income employees age 50 and over, must be made as after-tax Roth contributions.
NEW PAYROLL TAXES IN 2025 EFFECTIVE JANUARY 1, 2025
Delaware Paid Family Leave
- Employers with 10 or more employees are required to participate in Delaware Paid Family Leave. Small employers may choose to opt into the program, but a 3 year commitment is required before being able to opt out after a 12 month notice.
- Employers that are exempt from the mandate include employers with 9 or fewer employees, Federal government employers and Seasonal operations that fully shut down for a month or longer
- The tax rate for 2025 is 0.80% with the option to withhold 50% of the tax from employees
- Employer's should be registered with the Delaware LaborFirst by 01/01/2025.
- More information and registration information can be found at Delaware Paid Leave Is Coming - Delaware Department of Labor
Maine Paid Family Leave
- All Employers (except as required for employees of separate collective bargaining agreements with the same employer,) will be required to withhold the tax.
- Employers with less than 15 employees will withhold at a rate of 0.50%, with the ability to withhold all from the employee’s checks.
- Employers with more than 15 employees will be required to pay 1.00% with the ability to withhold 0.50% from the employees.
- Employer size will calculated from 10/01-09/30 based on employees being paid regardless of location, status, paid leave, or amount of hours worked. Any employer that has 20 or more calendar workweeks with more than 15 employees will pay the full premium.
- If an employer is changing the percentage being withheld from the employee, all employees must be notified in writing at least 7 days prior to the first affected paycheck
- Employers may not deduct back withholdings from the employee unless there was not enough wages to withhold the premium from them. If arrears occur due to low wages, the uncollected amounts may be collected from 1 or more future paychecks.
- Visit https://www.maine.gov/paidleave/ for the most up-to-date information.
Paid Family Leave Information
Below is a link to more information on different states and their Paid Family Leave laws across the United States. Please refer to the government agency/program for any final information, rates, and updates.
State Paid Family Leave Laws Across the U.S. | Bipartisan Policy Center
UPDATED PAYROLL TAXES AND LAWS - 2025
Federal Fair Labor Standards Act Minimum Amounts for Salary Exempt Employees
On November 15, 2024, a district court overruled the U.S. Department of Labor’s (DOL) regulation to increase the minimum salary level for the Fair Labor Standards Act. The minimum salary amounts will revert to the previous threshold of $684.00 per week. Below is a link to the judgement.
DOL Overtime Final Judgment.pdf
Social Security Wage Base Update:
2025 Social Security will be $176,100, up $7,500 from $168.600 in 2024.
Alabama Overtime 2024 - Exempt Overtime Exemption Ends June 30, 2025
The exemption began Jan. 1, 2024, and ends June 30, 2025. For the duration, employers must provide the information on a monthly or quarterly basis and no later than the due date for their monthly or quarterly withholding tax returns. The state revenue department will create forms for reporting the information.
California Salary Threshold for Overtime Exempt Employees for 2025
- Computer Software Employees: a minimum of $56.97 per hour for all hours worked, or a monthly salary of $9,888.13 and an annual salary of $118,657.43.
- Physicians: a minimum of $103.75 per hour
- Administrative, Professional, and Executive Employees: a minimum of $1,320.00 per week or $68,640.00 annual salary.
- Healthcare Employees: please see Health Care Worker Minimum Wage Frequently Asked Questions for more information
Washington State Threshold for Overtime Exempt Employees for 2025
- Small businesses (1-50 employees): $1,332.80/week ($69,305.60 a year)
- Large businesses (51 or more employees): $1,499.40/week ($77,968.80 a year)
Additional information can be found on the Labor and Industries Website Changes to Overtime Rules
Oregon Paid Family Leave
Oregon Paid Family Leave requires the employer to calculate their employer size. Below is a link that shows how to calculate your company’s total annual average employee count.
PaidLeave-Employer-Size-Instructions-EN.pdf
Washington Paid Family Leave
Starting Jan. 1, 2025:
- The premium rate will be 0.92%. The rate for 2024 is 0.74%.
Employers will pay 28.48% of the total premium and employees will pay 71.52
For clients subscribed to our ACA Manager Service
- It is important you review ACA reports and data at the beginning of each month every month and review and resolve any Compliance Alerts or incorrect data in a timely manner.
- ACA data is calculated after the first of the month and is calculated based on current company ACA settings and employee information. If changes are made to company ACA settings or employee information after ACA data has auto calculated, you must manually recalculate ACA data to reflect the changes.
- You will be reviewing all 2024 data in January 2025.
- January 13, 2025 to February 14, 2025: PayNW will generate Employee Forms 1095-C and Employer Forms 1094-C. For employees who have not given Electronic Consent for Form 1095-C, paper forms will be printed and shipped before the IRS deadline of March 1, 2025.
- March 3, 2025: Forms 1095-C due to employees.
- March 31, 2025: PayNW will generate and electronically transmit IRS AIR files by the IRS deadline of March 31, 2025. State specific files, if required, will be electronically transmitted by the deadline established by each state.
- April 1, 2025: ACA amended returns processing resumes.
2025 Minimum Wage Increases
As we approach the end of the year, it's important to be aware of the minimum wage changes scheduled for 2025. Each state sets its own minimum wage, and some cities have their own rates that may differ from the state minimum. It's your responsibility to stay updated on these rates and adjust accordingly.
Below is a chart of states with scheduled minimum wage increases effective January 1, 2025:
| State | Minimum Wage Rate |
| Alaska | $15.00 per hour |
| Arizona | $15.00 per hour |
| California | $16.50 per hour |
| Colorado | $14.81 per hour |
| Connecticut | $16.35 per hour |
| Delaware | $15.00 per hour |
| Illinois | $15.00 per hour |
| Maine | $14.15 per hour |
| Maryland | $15.00 per hour |
| Massachusetts | $15.00 per hour |
| Michigan | $10.33 per hour ($12.48 effective February 21, 2025) |
| Missouri | $15.00 per hour |
| Montana | $10.30 per hour |
| Nebraska | $12.00 per hour |
| New Jersey | $15.49 per hour |
| New York | $15.00 per hour |
| Ohio | $10.45 per hour |
| Oklahoma | $7.25 per hour |
| Oregon | $15.95 per hour |
| Rhode Island | $14.00 per hour |
| South Dakota | $11.20 per hour |
| Vermont | $15.00 per hour |
| Virginia | $12.41 per hour |
| Washington | $16.66 per hour |
Please note: Seattle and the City of SeaTac have higher minimum wage rates for 2025. For employers in those areas, the local minimum wage rate will apply as long as it is higher than the state minimum. Please ensure you are using the correct wage rate for your employees.
It is your responsibility to ensure employee rates are updated. PayNW will not intentionally change employee’s rate of pay without a request from the employer. Please contact your service representative at support@paynw.com for further questions or assistance.
CHANGES TO REPORTING CONTRACTOR WAGES - FORM 1099
Effective with 2020 reporting, the IRS requires Non-Employee Compensation (Independent Contractors) reported on a separate form 1099-NEC instead of prior used form 1099-MISC. All processed compensation will be moved to the new 1099-NEC form on your behalf. The IRS now requires 1099-MISC to be used for other forms of compensation such as rent payments, prizes, attorney payments, etc. Should those alternative compensations apply to you, please reach out to your service representative at support@paynw.com for adjustments. Please refer to the updated IRS Instructions for 1099 for further details.
Protect Employees and Your Business From Payroll Fraud
It is crucial to ensure you and your employees are protected. We highly recommend voice verification for direct deposit changes.
It is of paramount importance that we maintain the highest level of security and integrity in our financial processes, particularly when it comes to employee direct deposit changes. To ensure that your employees’ hard-earned money remains safe and secure, we strongly encourage all our clients to voice verify if a direct deposit change is requested from an employee via email. This additional layer of security helps protect against unauthorized alterations, safeguarding your funds from potential identity theft or fraud.
Employers should check out these two blog posts on payroll fraud, and direct deposit scams.
NACHA Operating Rules Reminders 2024-25
Each client authorizing PayNW to create and transmit ACH transactions is required to comply with the NACHA Operating Rules as stated within the ACH Services Addendum between PayNW and the client. The National Automated Clearing House Association (NACHA) is the rule making body governing the ACH network; therefore, all participants of the ACH network must comply with these Rules.
NACHA rules specific to client originators include:
- Client agrees not to provide any payroll information or entries which violate the laws or regulations of the United States or of any state in which Client does business
- Client agrees to comply with all NACHA operating rules and guidelines
- PayNW and its Originating Depository Financial Institution (ODFI) maintain the right to audit NACHA compliance and to terminate or suspend the ACH relationship for noncompliance with NACHA operating rules and guidelines
Stay up-to-date with the most current NACHA Rules. The NACHA Rules are available online by setting up a user account. Visit the NACHA Rules Online by clicking here.