📢 Introducing Lano 2.0!Global Employment just got a whole lot easier
📢 Introducing Lano 2.0!
Global Employment just got a whole lot easier
Payroll and compliance are the two things no business can afford to get wrong. If employees aren’t paid on time, they become less motivated, and fulfill their tasks with less efficiency and dedication, which usually results in poor business performance. As for compliance, making sure your company complies with all the existing regulations is key to ensure the continuity of your business and avoid hefty fines.
However, having a well-working payroll and compliance framework isn’t a given, but something that requires a lot of effort to establish. Organizations need to develop the necessary schedules and routines, and track the relevant dates and deadlines with precision to avoid hang-ups and delays.
For this purpose, businesses need a detailed payroll and compliance calendar that includes all the relevant information on payroll schedules, pay periods, compliance obligations and more. In this article, we’ll answer all your questions about payroll calendars and compliance calendars, and highlight their importance for global organizations.
Payroll calendars are crucial for making sure your employees are paid on time. They outline all the important dates related to payroll runs and employee payments, and therefore are a great help for payroll and/or HR team. A payroll calendar allows for precise planning and scheduling of your payroll processes by taking into account processing times, public holidays and more. Having a detailed payroll calendar is vital for smooth payroll operations.
The aim of a payroll calendar is to show you all the dates and information you need to process payroll on time. This includes:
Start and end of the pay period, e.g. from 15 August to 29 August
Payroll date, i.e. the day on which payroll is processed
Pay date, i.e. the day on which funds are administered to employees (e.g. 31 August)
Pay frequency, i.e. how often employees get paid
Deadlines for gathering timesheets
Additional information: bank details for each employee
Businesses have to fulfill several reporting obligations throughout the year, many of which are linked to payroll processing and tax filing. A compliance calendar can be used as a complementary feature of a payroll calendar to track crucial dates and deadlines for submitting income tax withheld from employee salaries to the local authorities, preparing monthly and annual payroll reports, filing social security declarations, issuing wage certificates to your employees and more.
In a nutshell: There are many different compliance-related dates the payroll team must be aware of. This is where a compliance calendar comes into play. In this calendar, you can simply note down all the important dates you shouldn’t miss, so that your team knows which report to prepare and when. As many important deadlines are related to your payroll processes, it makes sense to integrate your compliance calendar into your payroll calendar to consolidate all the necessary information in one place.
Please note: Compliance for businesses includes more than just payroll-related reporting obligations, since other deadlines such as the submittance dates for certain business permits and accreditation processes are equally crucial. In this blog post, however, we’ll focus on the payroll-related aspects of compliance calendars.
With regard to the payroll-related aspects of corporate compliance, a compliance calendar should include:
Type of compliance obligation (i.e. payroll tax return, social security declaration, income tax submittance etc.)
Deadline for the respective filing and reporting obligation (e.g. 12th or 15th of the month)
Which form to use and how to submit it (e.g. electronic declaration or other)
Necessary time for preparation: Depending on the nature of the report, your team may need a couple of days to gather the necessary information and compile the report - unless you consolidate your global payroll with Lano, which allows you to effortlessly review and analyze your global payroll data on one single screen.
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When it comes to payroll and compliance, organizations can’t afford any mistakes or hold-ups, both in terms of fines and employee retention. In other words: Having all their compliance and payroll processes in order is vital for businesses and organizations of any size. In this context, payroll and compliance calendars both have their respective benefits. The advantages of using a payroll calendar are:
Timely payroll processing and payments: Employees must be paid on time. Late payments create tension between employees and their employer and have a negative impact on employee morale, motivation and engagement. Ultimately, paying your team on time is crucial for employee retention, productivity and company success.
Better planning for system maintenance: Nowadays, companies rely on a number of different IT systems. At some point, these systems need to be updated and maintained. Since maintenance work can’t happen on days where the systems are needed for payroll processing, it’s vital to have a payroll calendar showing processing and payment dates.
The advantages of using a compliance calendar are:
Lower compliance risks: Missing compliance deadlines can have serious consequences, such as fines or other penalties imposed on your business by the local authorities. Setting up a compliance calendar can prevent this and protect your company from unnecessary risks.
Increased compliance awareness: A compliance calendar ensures all employees are aware of compliance requirements and deadlines. If everyone knows what to do and when, compliance mistakes can be avoided more easily.
More efficient use of human resources: A compliance calendar provides an overview of the different compliance-related tasks and processes and allows for better planning and scheduling. Knowing which tasks need to be completed and how often can help allocate the necessary resources and allow your team to work more efficiently.
Now that you know what advantages your business can gain from using a pay period calendar, you may wonder which steps to follow when creating one for your business. Basically, there are four steps when creating a payroll calendar:
Choose a pay schedule: There are different pay periods businesses can choose, i.e. daily, weekly, bi-weekly, semi-monthly or monthly. When choosing a pay schedule, organizations have to consider several factors, including legal regulations concerning the payroll frequency, the type of employment they offer (e.g. salaried employees are usually paid on a monthly basis) and the capacity of their HR, accounting and payroll teams.
Work out a schedule that works for your team: Determine when you need to start collecting payroll data and timesheets for the chosen pay period, when you need to run payroll and when you need to issue payments. The latter is especially important if you have to make international SWIFT payments, since they usually take longer.
Check for public holidays: Bank holidays may require an adjustment of the processing schedule for certain months. For example, if the normal payday falls on a public holiday. To ensure timely payment, you’ll have to start earlier than usual with collecting payroll-related information and also issue the payment earlier than usual.
Integrate your calendar into your payroll software and/or set reminders to stick to your schedule.
There are different programs you can use to create a pay calendar for your business. Many organizations rely on tools like Excel, Quickbooks and Xero.
Good to know: The Lano platform allows you to integrate all your favorite workforce management tools, including accounting tools such as Xero or Quickbooks to make managing your global workforce easier than ever before.
Creating a compliance calendar isn’t all that hard - especially considering the numerous benefits it brings to your business. Here are four easy steps you can follow:
Use the current compliance manual to get started: Every business should have a compliance manual where all the compliance-related information is gathered. Going through the manual carefully, while extracting all the important dates and tasks, is the first step in setting up a compliance calendar for your organization.
Check the validity of the information: Legal regulations change all the time. This doesn’t only include employment law changes, but also changes in payroll reporting. When creating your compliance calendar, you should check that all the information you gathered from your compliance manual is still valid.
Adjust schedules for preparation if necessary: Confirm with your team if the schedules you’ve used so far work for everyone or if there are some tasks they need more time for.
Create your compliance calendar and integrate it with your payroll calendar: Payroll calendars and compliance calendars go hand in hand. Therefore, you should make sure the information is synchronized.
Payroll and compliance calendars are designed to help organizations get their compliance into good shape and make sure their employees are paid on time and in accordance with legal regulations. Depending on the pay period and the frequency with which reports and withheld payroll taxes must be submitted, processing payroll and ensuring compliance can be quite a challenge for payroll teams, even if they are equipped with a payroll and compliance calendar.
Now imagine the extra effort it takes to accomplish this task if the process involves running payroll in several jurisdictions, which is a common situation for international organizations. With each jurisdiction, the compliance and payroll burden increases, along with the number of regulations and deadlines that need to be met. A centralized payroll and compliance calendar is crucial to ensure payroll compliance on a global level and facilitate global workforce management.
Payroll and compliance calendars are without a doubt a great way to improve your payroll processes and the overall compliance of your business. Unfortunately, the more countries your organization covers and the more distributed your workforce is, the more complicated it becomes to create a centralized compliance and payroll calendar covering all geographies. What’s more, as legal regulations are constantly changing, your compliance calendar needs to be kept up to date as well, which requires a lot of effort, research and knowledge of the legal landscape of the respective country.
An easy way for global organizations to solve this is payroll outsourcing. Instead of processing payroll in-house and forcing your team to deal with the local payroll and compliance complexities of various different countries, you can simply use the services of a local payroll provider.
At Lano, we work with a network of trusted payroll providers, covering over 150 countries worldwide. Simply choose the right payroll provider for your business and have the entire compliance and payroll burden taken off your shoulders. Plus, you can use our smart platform to integrate all your local service providers to enable automated data flows and consolidate payroll for all your entities. Book a demo to see how Lano can help you simplify your global payroll.
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