2 / 3
Payroll covers all aspects of paying a company’s employees. This
includes making sure that salaries are paid in the correct amount
and on time, that income tax is withheld, and that social security
contributions are made. Underpaying a valued team member by
accident can impact staff retention. Paying salary to an employee that
has already left is equally problematic, though for different reasons.
One would be surprised to learn how often these issues occur, or
more shockingly, how often employees are involved in defrauding
these funds.
With a region as fast-paced and dynamic as emerging Asia,
regulations affecting payroll change quickly. If one does not closely
follow these developments, it’s easy to miss an update and suddenly
fall out of compliance. In this way, a minor oversight can have major
ramifications. Depending on the jurisdiction, strict fines may be
imposed for incorrect or late payments of individual income tax
withholdings, or social security contributions.
At the same time, payroll is a tedious task that can distract from the
organization’s main purpose. Especially when a company is quickly
expanding its operations across different countries, it may not be
the best use of time to have the local manager personally handle
payroll transactions.
Outsourcing payroll then offers a solution. It takes valuable time off
the hands of local managers to have these processes automated.
Entrusting the matter to an experienced payroll outsourcer also
reduces the risk of error and non-compliance. Additionally, when
payroll is handled externally, reports can be sent directly to HQ,
ensuring confidentiality of sensitive information. This is where a pan-
Asian vendor becomes interesting as well. Instead of having separate
reports from a host of different jurisdictions, these can be collated
into a single report, making it easier for HQ to keep the overview.
ALBERTO VETTORETTI
Partner
Dezan Shira & Associates
INTRODUCTION