Modern payroll software can take away a lot of the manual stresses of the last pay period of the year and your EOY submissions. But there are still a lot of things to consider and check off your to-do list before the new tax year begins...
The new financial year is quickly creeping up on us, as always, so we’ve pulled together all the important things payroll professionals like you need to be on top of during year end. This guide explains:
Whether you manage payroll in-house or through a provider, the responsibility for accurate year-end reporting remains with the employer.
Payroll year-end processes remain broadly consistent year to year, but the compliance environment around payroll continues to evolve. For the 2025/26 year-end and the move into the 2026/27 tax year, employers should be aware of several developments affecting payroll governance, reporting and system configuration.
Statutory payments such as Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP), and Statutory Paternity Pay (SPP) remain key areas of scrutiny during payroll reconciliation.
At year-end, payroll teams should confirm that:
Even small configuration errors can accumulate across the year and become visible during year-end reconciliation.
Each April, employers must update payroll systems to reflect changes to statutory rates and thresholds. Before rolling payroll into the 2026/27 tax year, employers should verify:
Failure to update these values correctly can lead to wage underpayments or incorrect NIC calculations, both of which carry compliance and reputational risk.
In recent years there has been increasing focus on pay transparency, equal pay reporting and payroll data accuracy. While year-end reporting obligations themselves have not fundamentally changed, the expectation that organisations can demonstrate clear audit trails around pay decisions has increased.
As part of year-end preparation, many organisations now review:
Ensuring these adjustments are properly documented helps reduce audit and compliance exposure.
HMRC continues to expand its use of automated reconciliation across Real Time Information (RTI) submissions and other reporting streams. As a result, inconsistencies between payroll data, benefits reporting and other tax submissions are easier to detect.
Before submitting final payroll returns, organisations should ensure:
Year-end provides an important opportunity to confirm payroll records are complete and accurate before moving into the new tax year.
Many organisations now rely on automated payroll workflows and integrated HR-payroll systems. While automation reduces manual administration, it does not remove the need for careful year-end review.
Configuration issues, incorrect tax settings, or integration problems can remain unnoticed during the year and only become visible during reconciliation.
A structured year-end process helps ensure payroll systems are correctly configured before the new tax year begins.
Here are the top considerations you need to keep in mind during the 2025/26 payroll year end.
Do you process weekly, fortnightly, 4 weekly payrolls or monthly? Will you be processing Week 53, 54 or 56? Trying to get payroll out while preparing for year end can get chaotic, so don’t worry if you’re feeling a little frazzled.
Take a moment to breathe and note to yourself which payroll you’re processing and which financial year you’re in with it. Taking an extra minute to think may seem counterintuitive when you’re so busy, but it can really help prevent overwhelm.
Remember: if your payday falls on or before the 5th April, you are still in the 2025/26 tax year.
Does your payroll software automatically flag your FPS (Full Payment Submission) as 'Final' on the last Submission of the year? This can be extremely helpful and save you a lot of anxiety, reducing the risk of missed submissions and unnecessary rework. Check if your software has that capability and whether or not you have it set up correctly.
Top tip: If it doesn’t do that, or if you forget after the flag, set some calendar reminders and make sure you include it on your Final EPS (Employer Payment Summary).
Inaccurate payments can mean your company ends up on lists like HMRC’s Name and Shame List for organisations that have failed to pay the minimum wage. Be sure your PAYE, NI, Student Loans, etc are balanced as these can accidentally take employees below the minimum wage if not managed appropriately. Also consider the following questions:
Don’t forget to check whether or not your payroll system automatically flags any of these issues.
As well as finalising the current tax year, you'll have to start preparing for the new tax year (2026/27) as well. This is a great time to make sure you’re getting off to a good start with everything in order and not falling at the first payroll hurdle.
This should be a regular task on your to-do list to make sure you have access to the latest features, but especially at Year End. Applying the latest legislative updates and remaining compliant for the new tax year must be a priority.
In preparation for Period 1, make sure you have received or collected your new tax codes from HMRC. On top of that, employees ending the tax year on a Week 1\Month Tax code should start the new tax year on a cumulative basis.
If required, your employees must receive a P11D by 6th July and remember, P11D and P11D(b) submissions are now paperless and all submissions must be completed online via commercial software or HMRC’s PAYE Online service.
And finally, don’t forget that all employees employed by you on 5th April have to receive their P60 by 31st May.
Don't forget these important dates as we transition from the 2025/26 tax year to 2026/27! Keeping these in mind will help you stay on track for a healthy year ahead.
Use this checklist to ensure your payroll is accurate, compliant, and ready for the 2026/27 tax year.
Before closing the year, ask: