A company can hardly do without them: good employees. However, with the hiring of personnel, numerous formal things also come up to the entrepreneur. All of these come together in the payroll department and it is not only about the payment processing of monthly salaries and wages, but also the various reporting obligations are in the foreground.
What is payroll?
The legislature stipulates that every company is obliged to keep financial records and explicitly also to keep wages. Mostly the terms bookkeeping and bookkeeping are used as synonyms, even if that is not completely correct. Because the monthly pay slip is created in the payroll accounting and it must be clear on this when it was created and for which period it is valid. In addition, the gross salary, the deductions from this in detail and the remaining net salary must be legible.
The complexity of monthly payroll accounting depends largely on the type of company. If, for example, employees are paid according to hourly wages and their overtime and working hours on the weekends are additionally remunerated, then this causes significantly more work than a fixed salary for an employee. Because with the latter you do not have to recalculate every month, only the contractual changes have to be taken into account.
The individual elements of payroll accounting
- Maintenance of the personnel master data
- Management and maintenance of the annual wage accounts
- The fulfillment of the legally prescribed reporting requirements
- Creation of DTA files and accounting documents for financial accounting
- Optional: the creation of employment contracts, terminations, warnings, etc.
There is a wage account for every employee
The term wage account describes the collection of data records and each account contains all data that are relevant to the employee. What exactly such a wage account must contain is precisely defined by Section 41 of the Income Tax Act and Section 4 of the Wage Tax Implementation Ordinance (LSdTV).
According to howsmb, the payroll department prepares the pay slips for the employees and then hands them out at the end of the month. In addition to the pay slips for the employer or for his / her documents, there are also:
- The payout list
- The registration certificate for the social insurance
- The wage journal
However, these documents can differ from company to company.
The following must be included in a payroll account:
- Wage tax deduction
- Special payments such as short-time work allowance, bad weather allowance, etc.
- Loss of entitlement to earnings on at least five consecutive working days
- The personal data of the employee
- Annual allowance, annual additional amount, monthly amount, weekly amount or daily amount
- Pension allowance and supplement to this
- Day of wage payment
- Period of payment of wages
- Remuneration separated according to wages in kind and money
- Extraordinary income
- Withdrawals under the double tax agreement that are subject to the progression proviso
The legal obligations of payroll accounting
The payroll accounting must meet three statutory reporting requirements:
- It processes the so-called DEUEV notifications (data collection and transmission regulation). Behind this is the reporting of the employee’s data to the social security.
- You report the payments to the health insurance companies and receive the so-called health insurance certificates in return.
- She takes care of the income tax registration and thus ensures that the income tax is taxed at source. This means that the employee automatically receives the net value of his / her wages – since all social security amounts, health insurance premiums and taxes are automatically deducted from the gross amount.
The examination by the tax office and pension insurance
While the employees themselves can check the correctness of their billing on the basis of the monthly remuneration statements, the company is checked at regular intervals.
These are the checks by the tax office (external wage tax audit) and the insurance accounts by the pension insurance company. This checks the proper payment of the health insurance contributions as well as the contributions for long-term care insurance and statutory accident insurance. For payroll accounting, this means complying with the extensive documentation requirement for all payroll accounting documents stipulated by law.
The tasks of payroll accounting at a glance
- If a new employee joins the company, the payroll department opens the payroll documents and the employee is registered with the social security agency. Depending on the type of employment, there are also different documentation and reporting obligations that must be taken into account by the payroll department.
- During the employment of the employee, the payroll department prepares the payroll accounting, which, in addition to the determination of the total pay including wage and ancillary wage taxes, also includes the determination of the social security contributions to be paid and the preparation of the pay slips.
- The wage deductions are reported and transferred by the payroll department to the social security agencies and the tax office as well as, if necessary, to external payees.
- The payroll department usually processes the necessary employee resignations at the end of the month and reports them to the social security agencies. The creation of personnel statistics is also often required.
- The payroll department must close the payroll accounts at the end of the financial year and then report them to the social security agencies, the employment agency and the statistical offices.