Almost every year parts of the legal requirements change as well as the social security or insurance contributions. Especially for Small and Medium sized companies an outsourcing of payroll accounting might reduce cost and be more effective.
Many facts in favour of oursourcing
The raising requirements for specialist know how, the necessary discretion, automatic substitution and finally the cost for processing and software may make outsourcing an attractive solution.
Ask the right questions
- Do we have someone in our firm, who really has the necessary wide and deep specialist knowledge and has the possibility to undergo regular training?
- Does this person have enough time and desire, to process the payroll accounting?
- Would a concentration on the core business make more sense or be more productive?
- Would a concentration on the HR Management make more sense than processing the salary administration at the same time?
- It the substitution of the respective person granted? If the person falls ill or leaves can we compensate this with existing resources?
Depending on your answers outsourcing should be evaluated or implemented.
Second job with risks
In SME company payroll accounting and processing often is a second job for someone. But the prepare a reliable payroll accounting and correct wage statements (which are a legal certificate!) make it necessary that the person fulfilling this job is a real professional, knows the necessary details and is able to set all parameters in the salary accounting software correctly. A wrongly prepared salary statement is considered being a document fraud and can have unpleasant consequences.
The devil is in the details
This is especially true for payroll accounting. The reason is the Swiss federalism, which is very distinct when it comes to social security contributions. Almost every canton has different allowances for children, education, birth and other events. Same with the source taxes. They are handled very different by the 26 Swiss cantons and require quite some knowledge to get everything right.
More EU citizens – more complexity
More and more EU citizens and specialists are employed in Switzerland. Therefore, the social security agreements with other states also influence the payroll accounting. These raise a lot of questions concerning residence permits as well as taxation, illness and old age insurance.
Full or Part outsourcing
Depending on the individual case an outsourcing of the complete payroll accounting or of a part of the salary accounting or even doing the work by teaming up with your account must be considered. Depending on the existing knowledge and infrastructure different solutions are possible.
Which task can be taken over by the external partner
As soon as an outsourcing is taken into consideration the tasks should be evaluated and individually analysed concerning their necessity and periodicity (monthly, every quarter, yearly).
- Gather and process the different salaries (monthly, hourly and piece work)
- Gathering of expenses and integration into the salary payment
- Preparation of sundry payments such as overtime, 13th monthly wage, gratification, bonification and board member fees
- Gathering of data concerning occurring mutations including the registration and de-registration with social security institutions and insurances
- Preparation and shipment of the salary confirmations with you firm’s logo
- Timely payment of the wages by DTA-Transfer and payment approval by you
- Preparation of payroll accounting documentation to process it in your accounting system, if necessary structured by cost centres or departments
- Source tax declarations (can be necessary monthly as well in some cases) for the different cantons
- Control of the source tax assessments
- Preparation and communication of all social security declarations (AHV, ALV, FAK, childrens allowances, BVG, SUVA, UVG, UVGZ, KTG)
- Preparation and shipment of the wage statements
- Preparation and control of the bookings needed for a correct annual financial statement concerning payroll
- Analysis and statistics as required by the Swiss federation and the client
Optimized payroll accounting process and capable sparring partner
Together with your external partner all processes involved are optimized. On top, you gain a competent sparring partner for all kinds of law, tax and other questions connected with the salary accounting and the other HR tasks. If needed you can also get support in work contracts, expenses rules, international agreements in this field, work permits, source taxes and even compensation plans and employee participation programs.
Confidentiality is key
A critical issue is confidentiality and discretion. If these sensitive data are processed and kept outside your offices a maximum of confidentiality is secured. All respective information is transferred only between the external partner and the responsible person for your HR department, who is the internal contact for your employees.
Plan enough time to hand over the duties
Different steps have to be executed between the decision to outsource and the takeover of the respective tasks. Definition of the required services and tasks to be executed as well as their periodicity. The tender phase, preparation of data migration etc. An ideal point to start with an outsourcing is the year end. To implement the outsourcing without stress it makes sense to start the respective process at least 4-6 months before the closing date.
Outsourcing of the payroll accounting means for an SME: Reduced workload, more safety and confidentiality in this important field. Interested? Heinz Klauz, our specialist in this field is eager to help you along.