As 2025 winds down, it’s time to take care of important tasks related to payroll, benefits, compliance, and HR before the new year. Here’s your checklist.
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Your FREE HR Checklist
Here’s your checklist of important tasks related to payroll, benefits, compliance, and general HR.
Between wrapping up payroll, checking in on new tax requirements, and making sure your policies are in line with 2026’s laws, there’s a lot to juggle. The good news? Getting ahead of it now means less stress come January 1st.
PAYROLL & TAX

☑️Schedule Special Bonus Payrolls. Schedule all special bonus payrolls before year-end and verify that all taxable fringe benefits were withheld from paychecks during the year.
☑️Prepare for OBBBA Changes. The new One Big Beautiful Bill Act (OBBBA) makes it easier for small businesses to get tax relief and offer better benefits to their employees. While most of OBBBA’s provisions take effect after the new year, it’s important to start preparing now.
Begin by reviewing your employee benefits plan and payroll systems, and make necessary adjustments that apply to your business. Consult with your tax, legal, payroll, and HR advisors, or your PEO professionals, to ensure all compliance requirements are met. Follow the IRS for more updates and new guidance.📌Effective: Jan. 1, 2026
➡️➡️READ MORE: DIY Payroll. Just Because You Can, Does It Mean You Should?
COMPLIANCE

☑️Conduct Non-discrimination Testing. Non-discrimination testing is a set of IRS tests that reviews the fairness of an employee benefits plan. If you offer a 401K, 125 Premium Only Plan (POP), and flexible spending account (FSA), you must conduct non-discrimination testing on the last day of the plan year. This ensures benefits are available to all eligible employees under the same terms. 📌Deadline: Dec. 31, 2025 (for calendar year plans).
☑️Prepare for New Federal, State, and Local Employment Laws. New employment laws and changes go into effect on Jan. 1, 2026. Review all applicable laws, including state and local laws where your employees are working. 📌Effective: Jan. 1, 2026
BENEFITS

📌Once you finalize your plan, be sure to update all materials to reflect the new annual plan limits. If there are any employer contributions, include them as well.
☑️Distribute ERISA Disclosures. Review disclosure requirements for your employee benefits plan under the Employee Retirement Income Security Act (ERISA). Employers sponsoring group health plans must ensure the timely distribution of all required disclosures to applicable individuals.
☑️Prepare for 2026 ACA Threshold Increase. Review your health plan to ensure it meets the Affordable Care Act (ACA) affordability threshold requirements. The IRS has increased the 2026 threshold requirement for employer-sponsored health coverage from 9.02% to 9.96% of an employee’s household income.
📌Reminder: The adjusted threshold percentage applies to the plan year – not a calendar year.
☑️Distribute Annual Medicare Part D Notice and Prepare for Changes in 2026. If you provide prescription drug coverage, you must distribute a creditable coverage notice, Medicare Part D Notice of Creditable Coverage, to plan participants by Oct. 15, 2025. Employers offering prescription drug coverage must disclose the plan’s creditable status to CMS annually within 60 days of the start of the plan year. 📌Deadline: Oct. 15, 2025
➡️➡️READ MORE: Mental Health and the Workplace. What is the Employer’s Role?
In 2026, Medicare Part D will introduce a new benefit that could change the creditable status of employer-sponsored prescription drug coverage. Under the Inflation Reduction Act, employers providing Medicare Part D plans, including standalone Medicare prescription drug plans and Medicare Advantage plans with prescription drug coverage, are required to offer the option to pay out-of-pocket for prescription drug costs in the form of capped monthly installment payments instead of all at once at the pharmacy. 📌Effective: January 1, 2026
☑️Distribute Annual Compliance Notices. Each year, applicable employers are required to distribute certain compliance notices to employees. Examples include a Summary of Benefits and Coverage (SBC), privacy practices on personal health information (HIPAA), the Children’s Health Insurance Program Reauthorization Act on health coverage assistance (CHIPRA), and the Women’s Health and Cancer Rights Act (WHCRA).
📌Also, don’t forget that your wellness program needs to comply with the requirements of the Equal Employment Opportunity Commission (EEOC), the Americans with Disabilities Act (ADA), and the Genetic Information Non-discrimination Act (GINA).
GENERAL HR

☑️Remind Employees to Review Vacation Balances. Remind employees to check their PTO and vacation balances. This is especially important if you have a “use-it-or-lose-it” policy or limits on the amount of vacation time that can be carried over.
☑️Distribute Annual Internal Documents. Update all annual documents that need to be distributed to your employees before the end of the year, such as employee handbooks, updated workplace policies, and a calendar of company-observed holidays for 2026.
☑️Review and Update Illness and Attendance Guidelines. Given the typical increase in respiratory illnesses during winter months, review and update your company’s illness and attendance protocol and share it with employees to reduce the risk of workplace spread.
☑️Conduct a Quarterly Employee Check-in. Find out how your team is doing. Send out a quarterly survey to gather their feedback and make changes to amp up employee engagement.
Get Ready for 2026!
The last few months of the year can feel like a sprint, but they’re also your chance to set the tone for 2026. By tackling these deadlines, double-checking compliance, and giving benefits and payroll the attention they need, you’re protecting your business and setting your team up for a smooth start to the new year.
If you need help, we’ve got you covered. Depending on your business and industry, your HR checklist may be different and even more complex. As an IRS-certified Professional Employer Organization (PEO), Propel HR has been a leading provider of Human Resources and payroll solutions for more than 25 years. We partner with small to mid-sized businesses to manage payroll, employee benefits, compliance, and risks, and other HR functions in a way that maximizes efficiency and reduces costs. If you need help, just give us a call at (800) 446-6567, or to learn more, visit www.propelhr.com
PLEASE NOTE: This information is for general reference purposes only. Because laws, regulations, and filing deadlines are likely to change, please check with the appropriate organizations or government agencies for the latest information and consult your employment attorney and/or benefits advisor regarding your responsibilities. In addition, your business may be exempt from certain requirements and/or be subject to different requirements under the laws of your state. (Updated Oct. 8, 2025)
IT’S HERE!
Your FREE HR Checklist
Here’s your checklist of important tasks related to payroll, benefits, compliance, and general HR.
About Propel HR. Propel HR is an IRS-certified PEO that has been a leading provider of human resources and payroll solutions for 25 years. Propel partners with small to mid-sized businesses to manage payroll, employee benefits, compliance, and risks, and other HR functions in a way that maximizes efficiency and reduces costs. For more information, visit propelhr.com










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