Global Payroll Advisory
Published on 25 Feb 2022
Payroll, tax and employment laws around the world are regularly updated, and keeping track of these changes can be daunting. When managing employees in multiple countries, companies must be aware of when new regulations take place across all their operating entities, to make sure they are on top of when they will need to adhere to the new laws, and how to report the new changes to the relevant government agencies in those countries at the year-end.
Just as each country has unique employment regulations, the same goes for reporting requirements. Some countries require payroll tax, benefits, social insurance, and other employee withholding payments to be paid monthly, and subsequently reported annually by certain deadlines. Failure to produce accurate and compliant reporting and submissions to government agencies often results in fines and penalties which can put a significant strain to a company’s resources due to the additional work required to correct any reporting discrepancies.
In today’s world, advancements in the technology of pay data delivery have led to significant changes in how payroll is managed. Mexico can be considered a global first mover in requiring comprehensive and electronic submissions of tax-relevant data, including for payroll. The law requires that all pay calculations be electronically receipted via the Certificado Fiscal Digital Por Internet (“CFDI”) process. As a result, no year-end certificate needs to be generated, as employees can instantly access submission data online throughout the entire year, and most importantly when it’s time to do their annual tax returns.
Ireland provides a similar experience for employers and employees when the traditional year-end P60 certificate was eliminated and the country switched to fully electronic payroll reporting in January 2019. In this new system, employees will receive an end-of-year statement in their online account which they can use to complete any tax returns.
In other jurisdictions, such as Singapore, Malaysia and Australia, tax authorities provide certification or approval programmes for payroll software providers to demonstrate the compliance and real-time reporting capabilities of their software. While optional, businesses may find that implementing these approved solutions brings an added security and peace of mind to their payroll operations.
Getting one’s global payroll ready for year-end payroll and tax reporting can be complicated, but with the right planning and tools, the process can be made much less painful. The use of global payroll technology and the right process delivery model can help prepare for year-end and keep payrolls across jurisdictions up-to-date throughout the year.
In our White Paper, Eliminating Complexities in Year-end Payroll, we explore this topic in more detail and discuss the solutions for organisations with multi-country operations to successfully navigate the year-end payroll process, without a doubt the most stressful period for payroll operations. Download your copy today and find out how to best manage your global payroll, during the year-end period and beyond.
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