We describe the document flow planned for the month, and a schedule is compiled based on the payment dates approved by the client. Additional difficulties may arise if we are to work in line with internal regulations.
Where to begin? We first need to determine the documents and software necessary for this task, as well as how and when wages will be paid to employees. We also need to consider the rules in place for salary calculation and the documents that will be issued to employees. In other words, it is necessary to choose a payroll system before hiring employees.
This process becomes even more complicated if different work schedules are in place, when employees work in regions, if we need to consider bonus payments, hazardous working conditions, and people working under civil law contracts.
For example, an oil or gas company opens a new production site in the Far North where work will be performed on a rotational basis. It is then necessary to determine the amounts payable to employees, calculate their average earnings and report to the Pension Fund, Social Insurance Fund, tax and statistical authorities. It is also necessary to consider whether or not regional taxes should be paid, then payment amounts should be adjusted accordingly. To do so, the necessary documents should be collected primarily from the HR Department. They are then checked for completeness and errors. In addition, employees rarely understand the complexities of payroll so they often request clarifications as well as to receive their wages exactly on the set dates for this purpose.
What is included in our payroll services?
For example, a client would like to pay wages on the 10th of each month at the latest, but this date depends on when funds are credited to the client’s bank account, and this usually occurs from the 1st to the 10th of the month. In addition, we can duly fulfill our work only if we receive the necessary documents 3 working days before the payment dates. In such case, the final date for document submission will be determined after negotiations with the client as we need a very precise work schedule to ensure uninterrupted and flawless work. Such approach also helps optimizing client internal business processes.
Usually the larger a company, the more likely it is that payment dates are already determined so, in such cases, it is not necessary to develop a document flow scheme.
We collect information from various sources: from the client’s HR department or ours if we handle HR management for this particular client, from the client’s accounting department or ours if we provide accounting services to this client.
The representative offices of foreign companies in Russia do not always have information about their employees’ salaries. In such cases, the foreign company’s head office gives this information directly to us.
- Information about employee absence (vacation, sick leave, unpaid leave, unjustified absence, etc.), information about hours worked especially in case of hourly pay
- Information about employee benefits
- Information about bonuses
- Information about deductions
- Employee personal details (passport details, insurance certificate, etc.)
- Employee bank details
- Costing research
- Payroll preparation
All information is processed and all payroll calculations are made for temporary incapacity benefits, vacation, business trips, bonuses, allowances and for all payments guaranteed by client internal regulations and Russian law. Income tax and any other deductions set out by a particular client or for certain employees are also calculated.
- Remuneration statement
- Tax statement
- Files for upload to bank-client online banking system or paper orders for payment of wages and taxes
- Payslip for employees
- Report on unused vacation days
We also prepare any documents requested by clients such as, for example, detailed tax statements, a detailed list of entries made, different types of payslips.
- Statistical form P-4
- RSV-1 (report to the Pension Fund with individual data on employees)
- Form 4-FSS (report to the Social Insurance Fund)
- Form 6-NDFL from 2016 (personal income tax form)
- Register of personal income tax statements (2-NDFL) (to the Federal Tax Service)
- Statutory reporting is prepared to meet the deadlines set out by law
- Filing of statutory reporting
We submit reports on paper or XML format for electronic document flow. If necessary, we check the reporting filed with state authorities in previous periods. We also prepare corrective reporting to reduce the likelihood of fines and be able to file reporting in the future. For example, if errors are found in the reporting forms for the Pension Fund, and these errors are not rectified during the reporting period, the Pension Fund will not accept the report submitted for filing for the next reporting period. If this issue is not addressed promptly, this will give rise to many problems, and greater sums will be owed and payable to the Pension Fund. And the longer such situations are left unaddressed, the more difficult and costlier they are to resolve.
What tasks are handled by payroll outsourcing?
- Payroll for temporary incapacity for work
- Calculation of average earnings for vacation pay
- Severance payments; calculation of average earnings and personal income tax base; determining payment dates
- Payroll for foreign employees:
For example, a company’s general director is a French national who is a tax resident in Russia but receives some of his/her salary for work performed in Russia in his/her bank account in Paris. At the end of the tax period, this general director will be required to file a personal income tax return on form 3-NDFL to declare and pay tax on his/her income in Russia. If personal income tax has already been withheld and paid in France, to avoid double taxation, the general director will be entitled to deduct such payment from the tax amount payable in Russia so that he/she will not pay tax twice on the same remuneration.
- Submission of corrective statements
We offer the following to our clients:
- Full data confidentiality. We comply with all requirements of laws 152-FZ, 98-FZ, and 149-FZ on personal data, trade secret and data protection. We sign a non-disclosure agreement with each client.
- Our payroll services are provided by qualified accountants and expert methodologists. Our staff attends regular training courses at our “corporate university”.
- We operate in compliance with ISO 9001, ISO 27001 and SSAE 16 international quality standards and are audited by AFNOR.
- We provide services in any region in Russia and the CIS.
- Our professional liability is insured for up to RUB 180,000,000.
- A single contact person is assigned to resolve complex client issues.
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