A payroll compliance checklist you can run every pay cycle.

Set-up, once for each country

• Name the legal employer for every person you pay. Done when: A list shows each person, their country and the entity that employs them.

  Legal employer, defined

• Confirm the employer's payroll registrations. Done when: You hold the registration with the tax authority and the social security authority that the country guide names, or you know who holds them for you.
• Name who runs payroll in the country. Done when: One provider or team is named, with a contact and a back-up.
• Build the pay and filing calendar. Done when: Each country has its pay dates, cut-offs, payment deadlines and filing dates in one calendar, taken from the authority's own pages.

  Statutory filing calendar

• Agree how payroll is funded. Done when: Funds reach each country's account before the pay date, in the right currency.

  Payroll funding

Every cycle, the inputs

• List starters and leavers with their dates. Done when: Every change has a signed document behind it, and payroll received it before the cut-off.
• Check pay changes against approvals. Done when: Every rise, bonus or allowance in this cycle has an approved record.
• Check hours, overtime and leave. Done when: Time and absence data is final, and the person who approves it has signed it off.
• Check expenses and benefits in kind. Done when: Each is approved, has a receipt where needed, and sits in the right pay line.

Every cycle, the calculation

• Compare gross-to-net for a sample of people against the last cycle. Done when: You have explained every difference, and checked at least the highest paid, the lowest paid and every new starter.

  Gross-to-net pay

• Use rates from this year's source, not last year's file. Done when: Each statutory rate used in the run comes from the authority's current published figure, and the date you read it is recorded.
• Check the lowest pay lines against the country's minimum pay. Done when: You have compared them with the figure the authority publishes for the country, and noted the date read.
• Check the currency and the exchange rate. Done when: The pay currency is right and the rate, its source and its date are recorded.

  Multi-currency payroll

• Have a second person review the run. Done when: The reviewer is not the person who prepared it, and has signed the summary.

Every cycle, payment and filing

• Pay people by the date in their contract. Done when: Every payment has left on time and failed payments are fixed the same day.
• Pay withheld tax and contributions by each deadline. Done when: Each payment has a confirmation, and the amount matches the payroll register.
• File each return by its date. Done when: Each filing has a receipt saved against the pay cycle.

Records and year-end

• Issue payslips in the form the country asks for. Done when: Each person has a payslip that matches the register.

  Payroll register

• Reconcile payroll to the bank and the ledger. Done when: The totals agree, and any difference has a written reason.

  Payroll reconciliation

• Complete the year-end statements. Done when: Each statement the authority asks for is filed and a copy is given to the employee.
• Keep records for the period the country guide sets. Done when: A retention schedule names each record, the country and how long it is kept.

  Documentation retention schedule

• Review rates and rules at the start of each tax year. Done when: You have checked each country's new year figures and logged the changes.

What payroll compliance does not cover

Correct payroll covers tax and social contributions. It does not settle the questions below, so check them elsewhere.

• Check who the legal employer is. Done when: You can name the legal employer for every person, and it matches the contract.
• Check the contracts and each person's classification. Done when: Each person has a written contract, and each contractor has a classification check.

  Employee vs contractor checklist

• Check working time, leave and termination. Done when: These are covered by your HR compliance checks, not only by the payroll run.

  Top 10 HR compliance issues for multi-country teams