2025 Year-End Checklist for Your Company’s Labor Planning

The year-end closing is an important opportunity for companies to conduct a detailed analysis of their labor obligations.

Reviewing aspects related to payroll and Social Security helps avoid errors and penalties, optimize human resources management, and ensure the company complies with all labor and HR regulations.

Below, we present a year-end checklist focused on payroll review and planning key aspects related to Social Security.

 

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✅ Monthly Payroll Review

A thorough payroll review is the first step to ensure accuracy and compliance.

• • Verification of salary and non-salary items: check that all items included in the payroll (such as base salary, allowances, extra payments, and per diems) are correctly classified. Incorrect classification directly affects contributions and income tax (IRPF) withholding.
  • Review of allowances and salary review clauses: ensure that allowances such as night work, hazardous work, or on-call pay have been properly paid. Pay special attention to the salary guarantee clauses in the applicable collective agreement.
  • Adjustment of income tax (IRPF) withholdings: before the final payroll, adjust each employee’s withholdings according to their actual annual income and personal situation. This prevents surprises in their future tax return and potential issues for the company.
  • Analysis of benefits in kind and exemptions: verify that benefits in kind (health insurance, meal vouchers, etc.) do not exceed 30% of the employee’s gross annual salary. Check that income tax exemptions have been applied correctly.

✅Social Security Contributions: 2025 Year-End and Key Updates

Compliance with Social Security is fundamental. In addition to regular reviews, several important changes came into effect in 2025.

• • Comprehensive review of contribution bases: ensure the contribution bases correspond to each employee’s total remuneration. Verify that any salary changes have been correctly updated.
  • Verification of overtime contributions: confirm that overtime hours have been properly recorded and additional contributions have been paid.
  • NEW – Intergenerational Equity Mechanism (MEI) control: verify that the MEI contribution rate has been correctly applied throughout 2025. For 2025, this rate is 0.80%, split between employer (0.67%) and employee (0.13%).
  • NEW – Application of the additional solidarity contribution: since January 1, 2025, a solidarity contribution on the portion of salary exceeding the maximum contribution base is mandatory. Check that it has been correctly calculated and paid.
  • Audit of bonuses and reductions: if you have applied contribution benefits, ensure that all requirements for their maintenance are met, especially employment maintenance clauses. Non-compliance may require repayment with penalties.
  • Regularization of self-assessments (RED System): perform a final check of all submitted settlements. Correct any errors to avoid potential notices from the Social Security Treasury.

✅ Working Hours and Time Management

Time management remains a primary focus for the Labor Inspectorate.

• • Audit of working hours records: daily time tracking is mandatory for all employees. The system must be objective, reliable, and accessible, accurately reflecting start and end times. Ensure your system meets these requirements.
  • Management of vacations, absences, and sick leave: ensure all sick leaves have been correctly processed and reported. Track employees’ vacation balances. Remember that accrued but unused vacation must be paid out and contributions made at the end of the employment relationship.

✅ Adjustment of Contributions for Temporary and Part-Time Workers

Temporary and part-time contracts have specific contribution requirements. It is essential to review them at year-end:

• • Review of contributions for actual days worked: for part-time employees, ensure contributions match the days and hours actually worked. Companies must ensure that submitted data reflects the actual working hours.
  • Compliance with minimum contributions: ensure temporary and part-time contracts meet the minimum contributions required by law for each contribution group.

✅ Monitoring Sick Leave and Absences

Sick leave and absences affect both contributions and payroll payments. Keeping them updated is essential for compliance:

• • Review of sick leave: ensure all sick leaves have been properly processed and reported to Social Security. Check the supporting documentation to prevent incorrect payments or contributions.
  • Monitoring contribution periods: confirm that contribution periods reflect absences or sick leave. Companies must report any work-time changes affecting contribution bases.
  • Assessment of absenteeism: review justified and unjustified absences. Controlling absenteeism helps adjust human resource planning and improve staff management.

 

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✅ Year-End Documentation Preparation and Next-Year Planning

Year-end is the ideal time to review compliance with other key regulations and plan for the next year.

• Equality Plans and Salary Registers: verify if your company is required to have an Equality Plan and ensure it is current, registered, and updated. Make sure the salary register is also up to date.
• Anticipate the 2026 Minimum Wage increase: even if not yet published, plan the budgetary impact of a potential update on affected professional categories.
• Hiring and training planning for 2026:
  • Evaluate employment bonuses valid in 2026 to optimize future hires.
  • Plan the training credit (FUNDAE) for the next year and ensure 2025 training has been correctly justified.
• Occupational Risk Prevention (PRL): ensure risk assessments are up to date, especially if there have been changes in positions or organization.
• Preparation for a possible Labor Inspection: organize and make accessible all key labor documentation from recent years (working hours records, payrolls, contracts, equality plans, etc.). New contribution items such as MEI and solidarity quotas are likely to be areas of focus.
• Document archiving and retention: remember that the law requires keeping labor and Social Security documentation for at least four years. Digitizing and organizing this information is highly recommended.

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Year-end is a crucial moment to ensure that payroll management and Social Security are in order and fully compliant with all obligations.

This checklist is a practical guide to review every key aspect of labor management, from accurate payroll calculations to updated contribution bases.

A thorough review and proper planning will help you avoid legal issues, optimize workload, and start the new year with strong and well-organized labor management.