Closing payroll and archiving payroll are separate processes. You do not need to archive payroll at calendar year end. When you are ready to remove old payroll records from your current company, you archive it using the Archive Oldest Payroll Year tab.
When you archive payroll, you can also choose to remove employee remove records for employees who no longer work for the company.
Note: Generally, archiving payroll and archiving the fiscal year in the general ledger are separate processes that create separate archive companies. If you enter transactions between closing the fiscal year and closing payroll, back up and archive your accounting and payroll records separately to ensure that you have permanent records of all your data.
However, if your fiscal year ends on December 31 and your oldest fiscal year is the same as the payroll year you are archiving, you can combine your accounting data and your payroll data into one archive. You use the Archive Oldest Fiscal Year tab to create a combined archive.