Tis the Season: Payroll Year End around the World

As the festive season dawns, businesses across the world are gearing up for their own special time of year: the Payroll Year End

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...

Hong Kong

Colourful and vibrant, Hong Kong is a crossroads for Chinese, Asian and Global business.

Tax year: 1st April to 31st March

Shares & BiK: No monthly requirement to process shares and BiK on monthly payroll, and no monthly tax withholding requirement. Shares and BiK are reported in tax returns via forms IR56A & IR56B.

Reporting schedule: Monthly & Yearly

Monthly: The INB2 Remittance Statement (HSBC) should be completed monthly and submitted electronically, along with Mandatory Provident Fund (MPF) contributions, to  the MPF agency (HSBC) prior to the 10th of each month.

Yearly: Remuneration and pension information is reported by employers via the BIR56A and IR56B forms on a yearly basis. Submissions can be made in hardcopy to the Inland Revenue Department, or electronically, via the IRD's eTax system on the 1st April each year. Information to include on the BIR56A and IR56B forms includes:

  • Employees' gross income
  • Commission, fees and bonuses
  • Back pay, payment in lieu, terminal awards and gratuities
  • Any other BiK. including expenses and allowances

Explore Hong Kong’s diverse payroll landscape by reading our Insight page on the city...

Australia

Vast and beautiful, Australia is one of the Pacific's most favourable business locations...

Tax year: 1st July to 30th June for income tax, 1st April to 31st March for BiK.

Shares & BiK: No requirement to process shares and BiK on monthly payroll. Reporting of BiK is known as the Fringe Benefits Tax (FBT), and carried out by company accountants, or by an outsourced team.

Reporting schedule: Monthly, Quarterly & Yearly

Australian payroll reporting requirements may be carried out on both monthly, quarterly and annual schedules depending on the system preferred by the taxpayer.

Monthly: Payroll Tax and Workcover insurance premiums may be paid on a monthly basis by Australian employers (annual payments are also possible). The payments represent rateable remuneration based on different calculations of wages (including superannuation).

Payroll tax rates and thresholds vary by states and territories and are submitted to each state's revenue office or insurance company by the 7th of each month. Since the submission requires information external to payroll, employers must submit themselves.

Yearly: Annual tax reports detail employees' annual salary, including tax withheld, gross payments, reportable superannuation and reportable fringe benefits tax. The payroll agent submits the report to the Australian Tax Office (ATO) on behalf of the client. Employers must give their employees a payment summary by the 14th July. No physical signature is required on the relevant reporting forms and submission can be made online.

Employer's tax obligations also include Business Activity Statements (BAS) and Instalment Activity Statements (IAS) which may be submitted on a monthly, quarterly or annual basis. The forms are a way for employers to report relevant tax information to the ATO, including:

  • GST
  • PAYG withholding
  • PAYG instalments
  • FBT

Like the Payroll Tax and Workcover reports, activity statements involve non-payroll related information so employers must submit directly to the ATO with the signatures of their employees.

Find out everything you need to know about Australian payroll processing by checking out our Global Insight page...

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...

India

The tenth largest economy in the world, India is a rapidly growing business environment.

Tax year: 1st April to 31st March.

Shares & BiK: A busy tax schedule means payroll reporting is complex, but India has a requirement for quarterly reporting, along with a year-end benefits report.

Reporting schedule: Monthly, Quarterly & Yearly

India's tax system includes report dates for a variety of taxes and BiK throughout the year. 

  • Income Tax (TDS): Also known as Tax Deducted at Source (TDS), income tax must be paid on the 7th of every month, and filed with the Income Tax Department, using  the appropriate document or 'challan'. Online payment can be made using an e-challan.

  • Employee State Insurance (ESI): ESI is a social security and health scheme for Indian workers. ESI  should be filed on the 21st of every month via the relevant challan.

  • Employee's Provident Fund (PF): A retirement benefit scheme for Indian employees. PF reports should be filed by challan on the 25th of every month.

  • Professional Tax (P Tax): Depending on the state, P Tax is filed either monthly or annually. Contribution amounts vary by employee salary.

Quarterly & yearly TDS returns: TDS returns should be filed on a quarterly or yearly basis using Form 27A:

  • Quarterly TDS returns are due on the 31st July, 31st October and 31st January.
  • Annual TDS returns are due on the 31st May.

Discover more about Indian payroll, compliance, business and culture on our detailed India Bussiness Insight Guide...

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

Tax year: 1st January to 31st December

Shares & BiK: The USA requires share 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….

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 environment 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...