S-Corp Year-End Payroll Checklist: 5 Deadlines for 2026
If you run your own S-corp’s payroll, your real year-end deadline is December 31, not April 15. This S-corp year-end payroll checklist covers the items that actually have to close out before the calendar turns, plus one new rule for 2026: catch-up contributions from higher-paid owner-employees now have to go in as Roth money, not pre-tax. Miss that one and you’re into the final regulations’ prescribed correction methods on a deadline — not a quick retroactive payroll fix.
The New Roth Catch-Up Rule Hits Owners Over $150,000
SECURE 2.0 requires that catch-up contributions made by higher-paid employees be designated as Roth, not pre-tax. The threshold is based on the prior year’s wages from the sponsoring employer — not combined income, not 1099 income, just Box 3 Social Security wages your S-corp paid you. For 2026 catch-up contributions, the IRS set that threshold at $150,000 of 2025 wages, raised from the original $145,000 figure in the statute, under Notice 2025-67.
The final regulations implementing this rule technically apply to taxable years beginning after December 31, 2026, but the administrative transition relief that had been shielding plans from enforcement under Notice 2023-62 ended December 31, 2025. In practice, that makes 2026 the first year plan sponsors need to apply the rule, using a reasonable, good-faith interpretation of the statute, according to the IRS’s September 2025 announcement of the final rules. If your S-corp’s 401(k) doesn’t already offer a Roth option, any owner-employee over the $150,000 threshold loses access to catch-up contributions entirely until the plan adds one — the plan can’t just let them defer pre-tax instead.
Most profitable S-corp owners paying themselves a defensible reasonable salary cross $150,000 without trying. Check your plan document and your payroll provider’s catch-up coding before your last 2026 payroll runs, not after.
401(k) Limits Reset for 2026
The regular elective deferral limit rose to $24,500 for 2026, up from $23,500, per IRS Notice 2025-67. The standard catch-up for participants 50 and older is $8,000, and the SECURE 2.0 “super catch-up” for owners aged 60 to 63 is $11,250 instead of the standard amount. The overall section 415(c) limit on combined employee and employer contributions is $72,000, and the compensation that can be taken into account for plan purposes is capped at $360,000. If your S-corp runs a profit-sharing or safe-harbor match on top of deferrals, run the numbers against these new ceilings before your last payroll of the year, not during tax season when the room to fix an excess contribution has mostly closed. For the mechanics of how an S-corp’s defined contribution plan and payroll deductions fit together, see our S-corp 401(k) and SECURE 2.0 compliance guide.
Shareholder Health Insurance Still Has to Hit the W-2
This one isn’t new, but it still gets missed every December. Health insurance premiums the S-corp pays for a more-than-2% shareholder have to be added to that shareholder’s W-2 wages for the year — repairing a missed year later means a corrected W-2c and an amended return under Notice 2008-1, not a quick January adjustment, and the shareholder has no above-the-line deduction until the premiums are reported as wages. We covered the mechanics and the IRS authority behind it in detail in our S-corp health insurance deadline post; the short version for this checklist is to confirm the premium amount with your payroll provider now, not after the final payroll run.
Bonus Runs and the $100,000 Next-Day Deposit Rule
A year-end bonus run can push a single day’s accumulated payroll tax liability past $100,000, even for a small S-corp with just a couple of well-paid owner-employees. When that happens, the deposit is due the next business day regardless of whether you’re normally a monthly or semiweekly depositor, and a monthly depositor who trips this rule becomes a semiweekly depositor for the rest of the current year and all of the next one. Run bonus payroll at least one to two weeks before December 31 so your payroll processor and bank have time to process the deposit correctly instead of scrambling against a same-day wire.
Your Lookback Period Has Already Set Your 2027 Deposit Schedule
Your deposit schedule — monthly or semiweekly — isn’t something you choose; it’s set by your total Form 941 tax liability during a fixed four-quarter lookback period. For 2026 deposits, that window was July 1, 2024 through June 30, 2025. For 2027, it’s July 1, 2025 through June 30, 2026, a window that already closed before this post went up. If your reported liability in that window was $50,000 or less, you stay a monthly depositor; above that, you’re semiweekly for all of 2027. Pull your 941s for those four quarters now, under IRS deposit rules, so a shift to semiweekly deposits doesn’t surprise you in January.
Finishing Your S-Corp Year-End Payroll Checklist
None of this is complicated in isolation, but an S-corp owner is usually running payroll for a workforce of one or two people while also setting their own reasonable salary, deciding whether to true it up with a bonus, and managing a retirement plan they also participate in personally. That’s a different set of tradeoffs than a typical small-business payroll close, and it’s worth a second set of eyes before your last run of the year, especially if 2026 is the first year you’re over the $150,000 Roth catch-up threshold.
A good year-end payroll checklist doesn’t need to be long, but it does need to be run early enough to act on. Confirm your plan’s Roth option, true up health insurance wages, schedule the bonus run, and pull your 941 totals for the lookback window — all of that is easier to fix in November than in the last week of December. If you want help closing out the year correctly, reach out to our team.