2022 is racing towards the end of the year, and that gives payroll a lot to think about and consider as we’re wrapping up the final months. We have put together a checklist of the most important things to keep in mind for anyone working in payroll.
These are the most common benefits in Norway that may be reportable for the employees:
|Free board and lodging, housing
|Discounts from employers
|Discounts from third parties
As we’re racing towards the year’s end, it will be beneficial for companies in all countries to look into which of these are relevant for them specifically. Not all businesses require tollbooth subscriptions and free vehicles, but to cover all your bases, it is advised to make sure all insurances, fees, and invoices are up to date. As an employee you are responsible for reporting any of the above benefits and make sure it is all documented and ready for the new year.
Annual report from insurance companies in Norway
During the next few weeks you will receive an annual statement from your insurance company if any of your employees have taxable amounts. For pension, make sure that you each month download the invoice to Azets, for easier reporting of employer's tax.
Control tasks in Sweden
Since AGI was introduced in 2019, the need to issue control tasks for employees has disappeared. However, there are some cases where they are necessary. The tasks that may still be relevant, for example, are for employees with:
- Social security agreement (KU13)
- Interest income (KU20)
- Interest expense (KU25)
- Dividends etc. on co-ownership rights (KU31)
Reduction of car benefit value for long mileage in the service in Sweden
If your business requires one or more vehicles to spend some hours on the road, the long mileage will eventually result in reduction of the cars’ value. The mileage in the service will then have to surpass at least 3000 km in one calendar year, resulting in the value being reduced to 75% percent of the benefit value according to the normal calculation.
According to the Swedish Tax Agency, even those who have received an adjusted benefit value can almost always get such a value reduced to 75% if you drive 3,000 km in the service. Those who have received a lower benefit value due to extensive service driving should keep an accurate driving record with information about meter reading, times, travel length, destination and the case for the service driving, so that the mileage of 3 000 km can be proven if necessary.
Many did not have the opportunity to drive in service because of Covid. If the employees have not been able to achieve 3 000 km in service and the car benefit value has been reduced from the start of the year, this needs to be adjusted up before the end of the year via extra pay runs per month. If the employee has not had a reduction to 75% from the start but has come over 3 000 km now, this needs to be adjusted down to 75% per month.
Salary reconciliation in Denmark
As an employer, you are responsible for ensuring that the bookkeeping and accounting obligations are met by submitting annual accounts. This applies even if payroll processing, payment and withholding is carried out by a payroll agency.
Every employer who has paid wages in a calendar month is obliged to report them to SKAT. As an employer, you must also secure basic documents, control tracks and transaction tracks, cf. the Accounting Act.
The Minimum Requirement Executive Order requires that your company can present a reconciliation of the salaries and fees, etc. that have been reported to SKAT.
A payroll reconciliation consists of two parts:
- Reconciliation between payroll system and SKAT
- Reconciliation between payroll system and financial system.
The payment types created in your payroll system handle the individual payroll items separately, and similarly, it is a good idea to create a number of separate accounts in your financial system for posting these types of payroll. This gives you a better overview of the individual salary components and facilitates the work in relation to voting.
Provision of holiday pay and bonus in Denmark
In order for your annual accounts to accurately show a period's wage costs, you must calculate holiday pay, holiday supplements, bonuses, etc. so that there is a fair basis to make provision for this in the annual accounts.
You must pay particular attention to the method used to calculate the holiday pay provision. From the presentation of the 2020 annual accounts, the specific (accounting) method must be used for recognition in the annual accounts. If you as an employer have chosen to keep the frozen holiday pay obligation, this must appear as a long-term debt, and it must be indexed annually at the stated rate from the Employees' Holiday Funds.
As an employer, you should make a monthly statement of the company's holiday pay obligation incl. holiday bonus. In this way, you facilitate the work in relation to reconciliation of holiday pay and settlement of holiday pay by e.g. resignations.
What is the auditor looking for?
Your auditor should check that you have conducted a payroll reconciliation and that there are legitimate explanations for any differences. The auditors check not only that the AM income has been reconciled, but also pension, tax-free transport, and canteen VAT, in addition to ensuring that all provisions have been calculated and booked correctly.
The auditors also request documentation that A-tax, AM contributions, ATP, etc. is paid so that no debt is owed for this, so reconciling your tax account is highly recommended.
Control tasks in Finland
Finland uses a digital database, The Incomes Register, in which data about paid wages, pensions and benefits is reported. Income payers, such as employers and benefit payers, report data to the Incomes Register in real time, so there’s no need for checking these at the end of the year.
However, there are statutory social insurance contributions that the employer pays. Those include the following:
- Health insurance contributions ( for 16 to 67 year old employees who are covered by the Finnish social insurance system)
- Earnings-related pension contributions (for 17 to 68 year old employees whose monthly pay exceeds the minimum threshold for the obligation to provide insurance)
- Unemployment insurance contributions (for employees aged 17 to 64 if the total amount of wages paid to employees during the calendar year exceeds €1,300)
- Occupational accident and disease insurance contribution ( if the total amount of wages paid during a calendar year exceeds €1,300)
- Group life insurance contribution ( if it is so agreed in the collective labour agreement that applies to your company)
The amount to be paid as of health insurance contributions, earnings-related pension insurance contributions and unemployment insurance contributions is calculated as percentages of employees salary. The percentages are published in December each year and need to be checked from vero.fi (Finnish Tax Administration).
The employer and the employee pay for social security together. The Employment Fund administers unemployment insurance. Social insurance and health insurance contributions are paid to the tax authorities. Finnish statutory earnings-related pensions, as well as the workers’ compensation insurance and the employees’ group life insurance, are managed by private pension insurers.
If you need assistance with preparing for the annual reporting, or just get the overview of all tasks that lie ahead, you are welcome to tontact us. Azets has payroll expertise in all Nordic countries, and differentiate with our Nordic collaborative approach. Let us make your cross-country payroll processes seamless and efficient with our local knowledge.