Payroll: A global guide
International payroll can be a challenge. Here's some pitfalls to watch out for
Any country in which employees are based will have its own idiosyncrasies – from the need for some workers in Bangladesh to fill out a form to show to their bank every time they get paid, to the need in China to check work permits as part of payroll. Below, we highlight some key countries:
There are different social security rates between east and west, and church tax is paid depending on religious affiliation. Employees without children pay higher nursing insurance, and to be privately insured for healthcare they need to have earned above a certain threshold for the previous three years.
If monthly salary payments are delayed, a company can be fined 10% of the amount due. The Workers’ Statute guarantees two extra payments in addition to the 12 standard ones, one at Christmas and the other as set out in the Collective Agreement.
With 350 collective bargaining agreements, documentation is huge. No tax is deducted from pay because employees pay it themselves, but lots of different social security payments are necessary, so payslips often go on for two pages.
Companies must get approval from the People’s Bank of China when setting up a basic renminbi (RMB) bank account. Each time an employee joins or leaves the company, they must be registered/deregistered – and in the more rural areas, this red-tape activity is still handled manually.
Although overtime is allowed in specific services, all exceptions need ministry approval. There is no federal tax legislation in the United Arab Emirates, and all salary payments must be deposited electronically by companies via the Electronic Wage Payment System.
No work on Sunday can be done without prior agreement and employees can’t work more than 10 days without a 24-hour rest day. Those aged 14 to 18 can only work with a doctor’s permission, after a physical exam has been conducted, and for a maximum working day of 4.5 hours.
Payroll needs to be adjusted to reflect the fact that employees are paid for travelling to work if they use public transport, and are paid luncheon vouchers. Employees get paid 13.92 times a year, and certain categories of worker don’t get paid for holidays in their first year.
All 50 US states have their own tax laws in addition to the federal system. Most states have their own income tax in addition to federal income tax, and their own unemployment tax to fund social security programmes.