Step 3: Close 2025 Payroll

Closing 2025 has three main parts:   
               Close Process – End of Year       Automated Tax Update        Accumulation Rollover (optional)

Close Process – End of Year

Navigation: UTILITIES menu > Process End of Year

  1. Click CLOSE PROCESS on the Quick Links bar.
  2. Click OK when the process is complete.

Automated 2026 Tax Update - What It Changes

These taxes are updated by the Automated Tax Update:

  1. Federal Income Tax
    1. IRS 2026 tax tables are loaded in the Automated Tax Update.
  2. Social Security
    1. Wage base increases from $176,100 (2025) to $184,500 (2026)
    2. Employer rate: 6.2%
    3. Employee rate: 6.2%
  3. Medicare
    1. 1.45% for employer and employee on wages under $200,000.
    2. Extra 0.9% employee tax on wages over $200,000 (no employer match).
  4. Pennsylvania State Tax
    1. Rate stays at 3.07% for 2026.
    2. For other states, contact the Horizon Help Desk if rates change.
  5. Pennsylvania PSD Local Rates
    1. Updated with PA’s published rates.
    2. If you receive a local notice of a January 2026 rate change, verify the rate after the update.

Manual Tax Update

•    FUTA and UC are not updated by the Automated Tax Update and must be handled manually. 

•    UC employer rates must be updated using the rate supplied to your company.

Complete Automated Tax Update

To perform the Automated Tax Update, follow these steps:

Navigation: UTILITIES menu > Automated Tax Update

  1. There are checkboxes for each tax to update. Uncheck any tax you do not want to update.
  2. Click UPDATE PROCESS on the Quick Links bar.
  3. A box appears with the year of the tax tables, such as: “2026 Tax Year Update – Update?”
    1. Click YES to update tables or NO to cancel.
  4. The update may take a few minutes while it checks all local tax codes and rates.
  5. When you see “PSD Table Updated”, the update is done.
  6. After the update is complete, review:
    1. Federal tax tables
    2. Social Security and Medicare (FICA)
    3. State tax tables 

REMEMBER: If you do not have Internet or your network blocks this step, you may update tax rates manually.

Entitlement Rollover (Optional)

If you track entitlements (time off):

  1. Run the Entitlement Rollover after the last pay period that includes a time card date of 12/31/2025.
  2. Set up new-year entitlements as needed.
  3. Follow Rollover Entitlements at Year End for detailed steps.
  4. Do this after you run payroll for the pay period that contains December 31.

12/2025

NEED MORE HELP?  Submit a ticket to the Help Desk or call (814) 535-7810 or (800) 889-3388