Payroll Checkup : Risks

Failure to periodically verify payroll expenses can result in real financial and moral risks

An analysis of the calculation of salaries

It is important to analyze periodically the payroll taxes withheld from employees as well as the total reported payroll taxes. If you have not completed more than two years of salary management audits, it is recommended that you limit your company’s risk exposure by conducting an external salary and payroll audit.  

Those in charge of wage management often find it difficult to properly monitor and implement the constant legal and regulatory changes in both cantonal and federal social insurance and income tax laws. The routine is set up and the new rules are not or only partially applied.

REMINDER

CONSTANT WATCH

A periodic analysis will make it possible to anticipate the controls by having an accounting in good standing

EXPERTISE

If you don’t have the in-house expertise, an audit and external advice becomes the most logical response

AUDIT OVER 5 YEARS

In the event of an audit, the last 5 years will be analysed by the authorities with the consequences that may result

The risks to the business can become significant, the authorities can carry out at any time a payroll tax list for the previous 5 years as well as a tax reversal at source over 10 years. The contribution share of the employees taken back can certainly be deducted from them but with a significant cost on motivation and confidence in the employer.  In addition, it is generally impossible to recover the amount of the clawbacks from employees who have already left the company.

Businesses remain liable to tax at source, regardless of whether the employee has left the business or not. The amounts at stake can therefore be very large and represent a net loss.

Major shortcomings in the management of social insurance and/or taxation at source will also permanently tarnish the company’s image with the authorities.