More and more Estonian companies prefer to outsource payroll functions rather than have a staff position. The reason is that it’s a time-consuming job and requires use of the latest software and keeping up to date with frequent changes to legislation. Nor can it be overlooked that payroll accounting is quite time-critical for most employees – earnings must be calculated, checked and paid out in the space of a few days.
The main consideration for employees is that their salaries get transferred to them on the right day and in the right amount. Thus, payroll must always be done properly and timely, regardless of whether the payroll person is attending a professional training course, is on vacation or has fallen ill.
Optimizing internal workload and saving on costs are two arguments in favour of outsourcing payroll. Choosing a service provider gives assurance that salaries will get paid out timely and recognized properly in accounting even if the employee is on leave or sick. Grant Thornton Baltic has at least two accountants working with one client to ensure timely payroll even in special situations. Our team also provides advice to clients in more complicated matters related to payroll and accounting.
Furthermore, companies with a large staff ordinarily use different models for remunerating work: monthly salaries, hourly wages, overtime and night work, annual and sales-based bonuses and all sorts of hybrid models. All this makes payroll more time-consuming and full of nuances, which can all just be too much for a single accountant.
At Grant Thornton Baltic, we can consider the client’s needs and distribute the work among more than one team member, ensuring that salaries and wages are accounted for, verified on time, and that employees will receive their earnings on the agreed-upon day.
Secure personal data processing is increasingly important in payroll as well. The payroll software used by Grant Thornton Baltic ensures the principle of segregation of duties, and we send out encrypted payslips to our payroll clients’ staff. All that gives assurance that employees’ personal and wage data are handled in accordance with the European Union GDPR requirements and are securely protected.
The era when salary information was exchanged by email is gone for good.
Henkel Balti OÜ’s HR director Age Razumova says they decided to outsource payroll because confidentiality in this field is critical and Grant Thornton Baltic meets the Henkel international group’s security requirements for payroll.
Every amendment to legislation means many expensive changes in payroll programs. Even payroll software alone can mean thousands of euros of expenses per year for a business. By outsourcing, there is no reason to worry about continual upgrades or expenses, as the service provider takes care of this part.
In cooperation with clients, we have also developed various interfaces to automate the exchange of information between personnel software and payroll software, doing away with the need for manual data entry. That saves time and money for clients and Grant Thornton Baltic and minimizes the risk of human error.
Naturally, Grant Thornton Baltic’s accountants are always up to date with legislative amendments on the horizon and support clients in managing the changes. The most recent changes that should be noted include the rise in the minimum wage, the possibility of employees to change their preferences in the funded pension system and changes in the basic exemption for pensioners.
At Grant Thornton Baltic, we believe that good payroll administration starts with experienced and skilled accountants!
For more information on our payroll services, visit this page.
If you have similar challenges and questions, please contact our specialists.
