Tis the Season: Payroll Year End around the World

Last year, we explored the way payroll year ends are handled in locations across the world. Twelve months later, we’re updating our analysis and taking a look at new payroll territories…

Payroll legislation differs in every country in the world, but at the end of the tax year, all payroll staff share a similar purpose: the duty to tell their relevant tax authority what they owe in taxes. With this in mind, Year End activities for payroll staff are dedicated mainly to fulfilling tax obligations - that is, differentiating their business' cash remuneration from shares, share options and other non-cash benefits in kind (BiK).

The global payroll landscape is diverse: monthly reporting requirements vary significantly, tax years start and end at different times, and a spectrum of compliance issues converge to make every country's situation unique...

To help you become a little more familiar with international payroll environments, we've put together a shorthand guide to some of the world's most prominent territories…

Singapore

One of the world's busiest business hubs and a strategic gateway to the APAC region.

Tax year: 1st January to 31st December (on preceding year basis)

Shares & Bik: Singapore has no requirement to process shares and BiK on monthly payroll - nor is there a monthly tax withholding requirement. Instead shares and BiK are reported by appendices '8a and 8b' to the main tax return document (see below).

Reporting schedule: Yearly

Employee tax filings are reported on Form IR8A, also known as 'Return of Employee's Remuneration' submitted to the Inland Revenue Authority of Singapore (IRAS) by the 28th February each year. Form IR8A is part of an employee's greater personal income tax filing, itself due for submission by the 15th April for earnings in the previous year. Payroll providers are able to submit IR8A tax documents on behalf of their customers, providing they are authorized agents.

IR8A forms can be submitted online: electronic IR8As are designated 'IR8E' and available to users who submit their personal income tax returns through the IRAS portal. Employer signatures are not required for electronic submission but, if the payroll agent is submitting on behalf of their customer, email approval is required. Hardcopy IR8A submissions do require customer signatures.

Important information required to complete the IR8A includes:

• Employee personnel information: including NRIC/FIN number, residential address, designation, marital status, work commencement and cessation dates.
• Pay History: Information from all incomes, including base salary, commission, bonus payments, allowances, deductions.
• Benefits in Kind: All BiK information including those paid outside monthly payroll.

Learn more about payroll processing in Singapore by reading our Insight page on the city...

China

Populous, vibrant China is one of the fastest growing business hubs in APAC and the world.

Tax year: 1st January to 31st December (no 'Year End' tax return)

Shares & BiK: There is no separate 'Year End' tax return in China so shares, BiK and other payroll-related reports form part of a complete monthly return.

Reporting schedule: Monthly & Yearly

Monthly: Reporting obligations in China involve the completion and submission of the Monthly Social Security Report and the Monthly Individual Income Tax Report.

The Monthly Social Security report requires the following information:

• Monthly Social Security registration
• Monthly Social Security Termination
• Contribution (social security and housing fund) information

The report must be signed by the employer who must then submit it to the local Social Security Bureau in the first week of every month. An authorised payroll agent may also submit the document on behalf of the employer.

The Monthly Individual Income Tax Report (IIT) requires an Individual Income Tax Summary and accompanying detail information. Like the Social Security Report, the IIT must be signed by the employer, and submitted to the Local Tax Bureau by the 15th of each month.

Yearly: Annual income tax returns are required for any employees with incomes exceeding RMB 120,000 per year - reporting is required even if tax has been withheld on a monthly basis. Annual reports require the following information and material:

• Annual Income Summary
• A copy of government identification card

Employer signatures are required on annual returns, and documents should be submitted to the Local Tax Bureau (by the employer or authorised payroll agent) by the 31st March following the end of the tax year.

Discover more important information on payroll processing in China by exploring our Global Insight page…

France

History and culture have made France one of Europe's most important business portals.

Tax year: 1st January to 31st December (extended deadlines are available for internet reporting).

Shares & BiK: Expenses and reimbursements paid during the year should be provided to the payroll agent and reported in the Annual Declaration of Wage - submitted every year on the 31st January.

Reconciliation of social security declarations and other benefits takes place on an annual basis, to the relevant institutions.

Reporting schedule: Yearly

Employers must submit the following reports:

• Declaration Annuelle des Donnees Sociale (DADS): A statement by employers summarising the benefits and total remuneration paid to employees. The declaration must be submitted to the Caisse Régionale d'Assurance Maladie(CRAM) by 31st January.
• Fiche Fiscal/Employee Summary of Earnings: While it is not compulsory to provide the Fiche Fiscal document to employees, employers may do so at their discretion.
• ASSEDIC - Unemployment Social Security Annual Summary: Reports to the Association pour l'Emploi dans l'Industrie et le Commerce detail employees' unemployment insurance contributions. The report must be submitted by 31st January to USSRAF (expatriates submit their reports to GARP).
• URSSAF - The Social Security Annual Summary: Submitted to the Unions de Recouvrement des Cotisations de Sécurité Sociale et d'Allocations Familiales by the 31st January.
• Declaration Nominative Annuelle (DNA): The 'Annual Nomination Statement' details the accuracy of wage contributions to benefit schemes. Reports should be submitted to MEDERIC by the 31st January.
• Gras Savoye: Detailing medical and life assurance contributions, reports should be submitted to Gras Savoye by the 29th February.
• Cardif: Reports to Cardif concern employees' supplemental pension payments. Submissions should be made to Cardif by the 31st January.

Interested in learning more about delivering payroll in France? Explore our Global Insight page for information and inspiration…

Germany

Europe's financial powerhouse, Germany represents the epicentre of continental business.

Tax year: 1st January to 31st December

Shares & BiK: Germany has requirements for both monthly and yearly reporting of social security and BiK.

Reporting schedule: Monthly & Yearly

Monthly reporting obligations:

• Social Security Statements (Beitragsnachweise)
• Withholding Tax Statements (Lohnsteueranmeldung)

Yearly reporting obligations:

• Certificate of Wages (Lohnsteuerbescheinigung): Reports must be completed for each employee and submitted, at the latest, with the following year's March payroll.
• Social Security Statement (Sozialversicherungsmeldung/DEÜV): Completed for each employee and submitted, at the latest, with the following year's March payroll.
• Statutory Accident Insurance (Berufsgenossenschaftsmeldung): Completed by the employer and submitted, at the latest, with the following year's February payroll.
• Statement for Disabled Persons: Submitted by February the following year.

If you need to know more about Germany’s payroll rules and regulations, explore our Global Insight page…

USA

The United States is home to some of the world’s most important business organisations.

Tax year: 1st January to 31st December

Shares & BiK: The USA requires shares and BiK to be reported to the IRS on an employer's annual tax return.

Reporting schedule: Monthly, Quarterly & Yearly

Regarding federal taxes, employers must file Form 941 on a quarterly basis to reconcile all wages and taxes paid during the three-month periods of January-March, April-June, July-September and October-December. Form 940 is filed on an annual basis to report and pay any Federal Unemployment Taxes due.

Monthly, quarterly and year-end payroll processes for state and local jurisdictions vary by taxing authority. More specific details can be found on the American Payroll Association's website.

Form W-2 is completed by employers to detail wages paid to employees and taxes withheld. Mistakes made on the W-2 may result in a penalty of up to $100.00 per form. If a high number of W-2s need correction, that interest amount may be lower.

Find more important information about delivering payroll in the USA through our dedicated Global Insight page….

Italy

At the heart of the Mediterranean, Italy is a business gateway to Europe and North Africa.

Tax year: 1st January to 31st December

Shares & BiK: In Italy, shares and BIK are considered taxable income, and should be reported to authorities with monthly payroll.

Reporting schedule: Monthly & Yearly.

Annual reporting requirements:

• CU Form: The ‘Certificazione Unica”, also known as Annual Certificates for Tax & Social Security, must be submitted to employees by the payroll provider, and completed for the previous tax year. CU forms should then be submitted to the tax authority by the 7th of March.
• Autoliquidazione INAIL: An annual report of salaries must be made to INAIL (the National Institute for Insurance Against Industrial Accidents), using F24 Forms supplied by the payroll provider. The report deadline is the 16th of February.
• Denuncia Disabili: The ‘Disabled Persons’ Annual Report’ must be submitted to the labour office by the 31st of January by the payroll provider, or by a designated consultant. This requirement only applies to employers with 15 or more employees.
• Annual Withholding Tax Return: The payroll provider must submit the Annual Withholding Tax Return (Form 770), signed by the client, to the tax authority before the 31st of July.

Learn more about the payroll processing landscape in Italy with our extensive Insight Guide to the country.

Switzerland

Switzerland hosts a variety of distinguished financial institutions and businesses interests.

Tax year: 1st January to 31st December

Shares & BiK: In Switzerland, benefits in kind and share dividends are deducted monthly, along with income tax. Specific rates vary by administrative canton.

Reporting schedule: Monthly, Quarterly, Yearly.

Reporting requirements:

Switzerland has 26 tax authorities and around 100 governmental social security carriers (AHV) - all of which utilise their own reporting forms and have variations in the data they require from taxpayers. General requirements, however, are as follows:

• Business’ tax returns must be filed with authorities on a monthly or quarterly basis, depending on number of employees and canton.
• The data required from individual employees usually includes their tax code, amount of tax deducted, and their social security number. Depending on the return schedule, data must usually be submitted by the 10th of the following month.
• Required reporting data also includes employment start dates, employment end dates (for leavers), and employee social security numbers. The data must be filed by the 31st of January (or within 30 days for joiners).

Year-end AHV requirements

The AHV requires two returns at the end of the tax year:

1. A return of total salaries, subject to contributions - to be filed by the 31st of January of the subsequent year.
2. An estimate of total salaries for the following year, subject to contributions - to be filed by year-end. To avoid late interest, it’s important to adjust the total annual salaries amount during the year, if that amount has risen over 20% when compared with total salaries at the beginning of the year.

Discover more about tax reporting requirements and payroll processing in Switzerland by browsing the country’s dedicated global insight guide...

Bringing in the New...

Payroll is a crucial but exceedingly complicated part of business - so understanding the environment in which you are operating is key to achieving a high level of performance, not just at year end, but throughout the tax year.

While the administrative and legislative challenges of your territory go beyond the talking points listed above, ensuring your payroll department, or payroll agent, is familiar with its obligations should be a priority. From a global perspective, the intricacies of payroll reporting requirements change frequently - especially in periods of financial and political turmoil.

Your payroll department's knowledge of its operating environment, and indeed the wider landscape, will ensure it adapts to changes and continues to deliver the level of performance that you and your employees have come to expect - into the new tax year, and beyond.

Our Global Insight page offers advice and information on payroll in every corner of the globe: find important facts and figures, expert advice and inspiration on setting-up and running your business in a range of international territories...