End-of-year payroll checklist Québec: Your guide to a flawless finish

Payroll year-end. For many SMB owners, those three words are enough to cause a headache. It’s a time filled with spreadsheets, reconciliation and the looming dread of government deadlines. It feels like a high-stakes exam you never studied for, where one small mistake can lead to big problems with Revenu Québec and the CRA. But it doesn’t have to be a nightmare.

Closing out your payroll year is more than just a task — it’s a critical business function that proves your commitment to your team and your compliance. Getting it right builds trust. Getting it wrong erodes it. This is your chance to ensure every dollar is accounted for, every employee is paid correctly and your business starts the new year on a clean slate.

Let’s be honest — you didn’t start your business to become a payroll expert. You did it to build something amazing. This checklist is your guide to navigating the complexities of a Québec payroll year-end so you can get back to doing what you love. We’ll walk through everything you need to do before your last pay run, after your last pay run and as you prepare for the new year.

Before your last payroll of the calendar year

This is your pre-flight check. It’s about catching errors before they become year-end nightmares. Run through these steps to ensure your final pay run is clean, compliant and correct. Think of this stage as laying the foundation for a smooth and stress-free year-end process. Small checks now prevent massive headaches later.

Check employee and employer indicative data

Bad data leads to costly mistakes. Verify every detail. Ensure all employee Social Insurance Numbers (SINs) and addresses are correct. Confirm your business number and Revenu Québec identification number are accurate. It sounds simple, but a single transposed digit in a SIN can lead to a rejected filing and hours of frustrating follow-up. An incorrect address means an employee might not receive their T4 or RL-1 slip on time, creating unnecessary stress for them and extra work for you. This is the moment to get your data house in order. Don’t just assume it’s right — verify it.

Check wage, tax and benefits data

Scrutinize the numbers. Review year-to-date earnings deductions and taxable benefits for every employee. One small error here can throw off your entire year-end reconciliation. Go through each employee’s file and compare their year-to-date totals with your master payroll register. Are the Québec Pension Plan (QPP) and Québec Parental Insurance Plan (QPIP) contributions calculated correctly? Have all taxable benefits from company car usage to gym memberships been properly recorded? This is your chance to be a detective and hunt down discrepancies before they become a bigger issue. A thorough review now is one of the most valuable things you can do for a clean close.

Check for special procedures

Handle the exceptions now, not later. Plan for any off-cycle payments like bonuses, retroactive pay adjustments or vacation payouts. Ensure they are processed correctly in this final run to avoid issues with T4s and RL-1s. These non-standard payments can often trip up even seasoned payroll pros. For example, a large bonus could push an employee into a new tax bracket or affect their QPP contributions for the year. By planning for these payments in your final regular pay run, you ensure all statutory deductions are calculated correctly and included in their final year-end totals. It’s about managing complexity proactively instead of reacting to it after the fact.

After your last payroll, but before the first payroll of the new calendar year

The year is closed, but the work isn’t done. This is the critical window to finalize your 2025 data and set up 2026 for success. Don’t roll into the new year with old problems. This period is all about locking in your numbers, reconciling everything and preparing the necessary government slips. It’s the bridge between the year you’ve just finished and the one you’re about to start.

Finalize employee and employer data

Lock it in. Do one last check of all employee and employer information. This is your last chance to correct SINs, addresses or legal names before filing your year-end summaries. Any changes made after you file will require you to issue amended slips, which is a bureaucratic process nobody enjoys. Confirm that you have the correct legal name for each employee as it appears on their SIN card and that their mailing address is current. A quick confirmation email to your team can help catch any recent moves or name changes.

Finalize wage, tax and benefits data

Reconcile every dollar. Confirm that all year-to-date totals for wages, taxes, QPP, QPIP and EI are final and accurate. This is the data that will populate your T4 and RL-1 slips. Your payroll system’s totals must be your single source of truth. Run a final year-to-date report and hold onto it. This report is the basis for everything that follows. Any adjustments or changes from this point forward must be carefully documented. This step isn’t just about compliance — it’s about financial integrity.

Process year-end adjustments

Address any final adjustments now. Process any remaining taxable benefit calculations (like for company cars or insurance premiums) or other year-end accounting entries that affect payroll. Sometimes, certain benefits can only be calculated once the year is complete. For example, the standby charge for a company vehicle or the value of a loan to an employee. These figures need to be added to the employee’s income before you can generate their tax slips. This is also the time to make any final accounting adjustments that might impact payroll liabilities. Getting these done now ensures your T4 and RL-1 slips are 100% accurate.

Reconcile your books

Your payroll system and your accounting ledger must tell the same story. Reconcile your total payroll expenses, remittances paid and wages payable against your general ledger. Investigate and resolve any discrepancies immediately. The total gross wages from your payroll system should match the wages expense in your accounting software. The total remittances you sent to the CRA and Revenu Québec should match the liability accounts. If they don’t, you need to find out why. Was a remittance payment miscoded? Was a manual cheque not recorded in the payroll system? Finding and fixing these issues is crucial for accurate financial statements and tax filings.

Review all approved payrolls

Do a final scan of the entire year. Review all pay runs from the past year to spot any anomalies or inconsistencies that were missed. A high-level review can catch errors that a line-by-line check might not. Look for things that seem out of place. Did an employee’s pay suddenly jump or drop without a clear reason? Were there any pay periods with unusually high or low deductions? This big-picture view can reveal patterns or one-off errors that slipped through the cracks during the year. It’s one last quality control check before you move to issuing slips.

Add missing taxable benefits or deductions

Don’t let anything fall through the cracks. This is your final opportunity to add any missed taxable benefits — like group life insurance premiums or gym memberships — to employees’ income before issuing tax slips. Ensure all deductions are accounted for. It’s easy for non-cash benefits to be overlooked during the hustle and bustle of the year. Go back through your records and make sure everything that should be considered part of an employee’s income has been included. This protects both you and your employees from future tax headaches. Using robust payroll software can help automate the tracking of these benefits, making this step much simpler.

Review business structure changes

If your business changes, your payroll might need to as well. Did you buy or sell a part of the business? Did your corporate structure shift? Confirm these changes are reflected correctly in your payroll system and CRA/Revenu Québec accounts. A change in business structure can have significant payroll implications, from needing a new business number to understanding how to handle employee records in an acquisition. Make sure your payroll setup accurately reflects your current business reality to ensure your year-end reporting is filed under the correct entity.

Preview T4 and RL-1 slips

Never issue slips without a preview, and remember that T4s and RL-1s have different reporting requirements. Generate draft copies of all T4 (federal) and RL-1 (Québec) slips. Review them for accuracy and completeness. Check names, incomes and deduction amounts. This simple step saves you from the headache of issuing amendments later. Look at each box on the T4 and RL-1. Does the income in Box 14 of the T4 match the income in Box A of the RL-1? Are all the specific Québec amounts reported correctly in the various boxes of the RL-1?

Having a second person review the slips is a great practice. It’s much easier to fix a typo on a draft than it is to amend a filed slip. For a deeper dive into payroll details, explore our comprehensive guide to running payroll in Québec.

Review important direct deposit dates

A late paycheque is a broken promise. Review your direct deposit schedule, paying close attention to statutory holidays in early January that could affect processing times and payment dates for your first payroll of the new year. Banks don’t process payments on holidays, so you need to adjust your submission dates accordingly to ensure your team gets paid on time. Communicating any changes to your employees in advance is a simple way to show you respect their time and financial planning.

Review T4A and RL-2 contractor information

Your compliance duty extends to contractors. Review all payments made to independent contractors and prepare to issue T4A and RL-2 slips where required. Ensure you have accurate SINs or business numbers for all recipients. If you paid a contractor more than $500 in the year for services rendered, you generally need to issue these slips. This is a commonly overlooked part of the year-end process, but failing to file can result in penalties. Confirm you have all the necessary information for each contractor before the filing deadline.

Update employee tax profiles for the upcoming tax year

Get ready for the new year. Update your payroll system with the new year’s TD1 and TP-1015.3-V source deduction claim amounts for all employees. Ensure any carry-forward amounts for things like vacation or sick time are correct. Each year, the federal and provincial governments update the basic personal amounts used for calculating payroll deductions in Canada. Your payroll system needs these new figures to tax employees correctly from their first paycheque of the new year. It’s also a good time to have employees review and update their tax claim forms if their personal situation has changed.

Confirm your deposit frequency for the upcoming tax year

The CRA and Revenu Québec will notify you of your payroll remittance frequency for the new year based on your past payroll size. Confirm your new schedule (e.g. monthly, quarterly) and update your process to ensure you remit on time every time. Your remitter type is based on your average monthly withholding amount. As your business grows, your frequency may change from quarterly to monthly or even more often. Missing this notification and failing to remit on your new schedule can lead to immediate penalties and interest. Check your mail and online accounts for this notification and update your calendar accordingly.

Tackling this end-of-year payroll checklist for Québec might seem daunting, but breaking it down into manageable steps makes all the difference. This isn’t just about closing the books; it’s about starting the new year with confidence, knowing your payroll is clean, compliant and correct.If you find yourself buried in spreadsheets and struggling to keep up, it might be time to explore a better way. Modern solutions like payroll and compliance management tools can automate many of these steps. And if you’d rather hand it all over to the experts, managed payroll services can take the entire burden off your plate. Understanding how payroll software works can be the first step toward a future with less payroll stress.