2025 Year-End HR Checklist: What Every Employer Should Do Before 2026
As 2025 wraps up, HR teams face one last mission — closing out the year cleanly and preparing for a smooth transition into 2026. From payroll audits to labor law updates, this checklist helps you stay compliant, organized, and ready for the new year.
What’s the first thing HR should do before year-end?
Start by updating employee contact information. Confirm that every employee’s address, phone number, and email are current. This ensures W-2s and other important documents arrive without issue in January.
If any employees have moved to another state, verify that your company is registered as an employer in that state. Getting this handled early prevents payroll tax delays and state compliance issues later.
Make sure employees review their withholdings and personal payroll settings
Encourage employees to refresh their W-4 information. Many employees forget to update their federal withholdings throughout the year, which can lead to unexpected tax results. Encourage them to log in to your payroll system to review their W-4 settings, update addresses, and check other personal details.
If your platform supports self-service updates, send a quick year-end reminder, it saves time for everyone.
Analyze turnover rates before 2026
Reviewing turnover data helps shape better hiring and retention strategies. Pull your year-to-date turnover reports companywide and by department. Identify patterns. Are certain teams seeing higher attrition? Exit interviews and manager feedback can reveal whether issues stem from culture, workload, or management practices.
This data-driven review helps you enter 2026 with a stronger understanding of your workforce health.
What payroll and classification audits should HR complete?
Accurate payroll and classifications prevent compliance problems. Audit all employee classifications to ensure they are correctly designated as exempt (salaried) or non-exempt (hourly).
Then, review payroll data for accuracy. Clean records now will make year-end reporting, including W-2s and ACA forms, much smoother.
Most payroll providers offer year-end guides or webinars; take advantage of these resources to ensure compliance with their reporting process.
Prepare for W-2 and 1099 reporting
Data accuracy now saves you from costly corrections later. Payroll vendors typically auto-generate W-2s, but errors in employee data can lead to costly reprints.
Work with your accounting team to ensure all contractors are properly identified for 1099s as well. Getting these records finalized before the new year prevents January chaos and late penalties.
Prepare ACA-1095 forms
Begin ACA reporting prep before the calendar flips. Employers with 50 or more employees or small groups that self-insure must provide ACA-1095s to employees. Begin planning your ACA-1095 form submissions now.
Check that employee coverage and eligibility information are up to date. Early preparation avoids filing delays and compliance risks once the new year begins.
What reminders should HR send about 401(k) contributions?
Help employees maximize 2026 retirement contributions. Before the new year, send employees a reminder about 401(k) contribution limits and adjustments. For 2026, limits are:
- $24,500 for employee salary deferrals
- $8,000 catch-up for employees aged 50+
Encourage employees to review their current contribution rates to take full advantage of these limits, or start contributing if they haven’t yet.
Remind employees to submit FSA receipts
Remind employees to re-enroll and submit receipts on time. For companies offering a Flexible Spending Account (FSA), ensure employees re-enroll for 2026 and understand deadlines for submitting 2025 receipts.
Remind participants that receipts must be dated within 2025, though many plans allow submission through March of the following year. Clear communication helps prevent forfeited funds and employee frustration.
Review websites and job listings
Year-end is the perfect time to refresh digital HR materials. Audit both your internal HR portal and external careers site. Update contact details, job postings, and compliance statements.
An accurate and polished web presence ensures your organization looks professional to candidates — and compliant to regulators.
Prepare for labor law updates
Review 2026 updates now to avoid last-minute noncompliance. Every January brings new labor regulations, from minimum wage increases to posting requirements and state-specific updates.
Research changes that apply to your locations and update policies, handbooks, and workplace posters accordingly.
Clarify holiday and winter work policies
Clear expectations reduce confusion and build trust. Review your holiday schedule, weather closure procedures, and PTO policies. Let employees know:
- Which days the office will be closed (e.g., Dec 24, 25, 31, Jan 1)
- How closure notices will be communicated
- Whether “Holiday Pay” applies to those working on key dates
Proactive communication helps teams plan time off and reduces last-minute disputes.
Some fun ways to celebrate the holidays at work
End the year with gratitude and connection. Holiday celebrations don’t have to be extravagant. Small, inclusive activities go a long way!
Ideas include:
🎁 Ugly sweater contests
🍪 Cookie decorating
🎲 Holiday trivia or scavenger hunts
🎁 Secret Santa or white elephant gift exchanges
🥗 Potluck lunches
These activities foster morale, connection, and appreciation as the year draws to a close.
What’s the final takeaway for HR leaders closing out 2025?
Preparation now ensures a confident, compliant start to 2026. By updating records, reviewing compliance, and communicating proactively, you set your company up for success.
As you head into the holidays, take a moment to appreciate your team and reflect on what went well this year.
From all of us at Ignite HR Solutions, we wish you a peaceful, joyful, and gratitude-filled holiday season and a strong start to 2026.