Year-end payroll checklist for SMBs (2026)

The job

Year-end payroll for a US shop under ~50 is: a last 2026 run that includes bonuses and corrections, W-2s and 1099s that match what you actually paid, state and federal annual filings your vendor says it will do, and a 2027 setup that does not inherit a ghost employee. Gusto, OnPay, Square Payroll, and Workforce will file a lot of this if you finished setup. They will not invent a contractor’s TIN. Payroll-tax mistakes is the sibling. First employee onboarding checklist is how you avoid next year’s mess. We are not your tax preparer.

Before the last run

• Freeze the employee list. Terminations have a final paycheck rule in many states. Ask counsel; do not “catch them in January.”
• Bonuses, commissions, and taxable gifts: run them in 2026 if they are 2026 wages. Off-cycle exists. OnPay advertises no extra fee for off-cycle on the card we reviewed — confirm help.onpay.com.
• Address and SSN/TIN errors: fix them now. A W-2 with a typo is a January support ticket.
• Benefits and pretax: confirm deductions match the plan. Gusto benefits next door is why some shops stay on Gusto vs OnPay.
• Multi-state: confirm every work state is in the account. Gusto Simple is single-state. Plus or OnPay if you grew into a second state this year.
• Owner / S-corp salary: reasonable compensation is a CPA conversation. A missed owner payroll is not “we’ll journal it.”
• Time off payouts: write the policy once. Software will not invent it.

Forms

• W-2 / W-3: the payroll vendor usually e-files and delivers employee copies if you hit their deadline. Read the in-app calendar. Do not assume “they just know.”
• 1099-NEC for contractors you paid $600+ (confirm the current IRS threshold). Collect W-9s. Gusto Contractor Only $35 + $6 can issue 1099s if those people live in Gusto. Wave and QBO have 1099 paths — confirm the live SKU.
• 941 / annual federal and state: quarterly should already be done. Year-end is the reconciliation, not the first time you look.
• New-year setup: pay rates, 2027 tax tables (the vendor updates these), and a first payday on the calendar. Do not run January on 2026 rates because you were tired.

Software napkins as of September 21, 2026

Gusto Simple $49 + $6, Plus $80 + $12, Premium $180 + $22, Contractor Only $35 + $6. OnPay $49 + $6 with multi-state included on their card. Square Payroll $35 + $6. Homebase payroll $39 + $6-class. QBO Workforce $50 + $7+ plus QBO $38–$340. Confirm gusto.com/product/pricing, onpay.com, squareup.com/us/en/payroll/pricing, and intuit.com. Paychex and ADP are quotes — ask for the year-end line in writing.

How much Gusto costs for 10 employees is $109 Simple. Is OnPay worth it is the multi-state skip-if. Restaurant, salon, dental, gym, childcare, and retail payroll pages exist if the floor is hourly and tipped. This checklist is the calendar, not the industry fork.

Skip-ifs

• Switching payroll vendors in December without a planned cutoff. Finish the year, then move.
• Paying contractors on a personal Venmo and hoping a 1099 appears.
• AI “payroll assistants” as the filing. Aiacent. The IRS still wants a form.
• Skipping owner payroll on an S-corp because “we’ll clean it up.”
• Buying Rippling in December to “be ready for scale.” See Rippling vs Gusto.