Outsourcing is a crucial part in international business strategies. While there are many different business processes that can be outsourced, payroll, as a core business process, is a commonly outsourced function, especially for larger organisations. In this blog you will be introduced to different payroll options in Cyprus for companies and the main benefits of payroll outsourcing.
Cyprus Payroll Options for Companies
- Remote: Businesses may choose to operate under a single payroll system for all employees, by adding employees in Cyprus to your parent company’s payroll. One option for a non-resident company to payroll its employees (local & foreign) in Cyprus is to use a fully outsourced service like a GEO or PEO, which will employ and payroll the staff on their behalf.
- Internal: Larger companies with a commitment to Cyprus may want to run their own local payroll for all employees, foreign and local. In order to do this, companies will have to complete the incorporation, register the business and then hire the necessary staff. For this approach to be successful, it is necessary to employ an in country human resources professional who has the knowledge on Cypriot payroll and can fulfil all tax, withholding tax and payroll requirements. This is a costly approach, and the company will need a local accounting firm and potentially legal counsel to ensure full compliance with Cypriot employment laws.
- Local Payroll Administration: In some cases, companies will register their business in Cyprus under one of the forms available but prefer to have another company administer payroll. This occurs through a payroll provider. It is important to note, that the company, as the Employer of Record, still carries full responsibility for compliance with employment, immigration, tax, and payroll regulations, but the payroll calculations, payments and filings can all be outsourced to the payroll provider.
- Global PEO: Some companies can opt to work with Globalisation Partners through Cyprus payroll outsourcing. This means the global partners will add your companys’ employees to their payroll and handle the compliance as the Employer of Record.
Benefits of Payroll Outsourcing
Saves time
Payroll overall is a time-consuming process that demands a lot of attention to detail. This often comes at a cost of valuable time that could otherwise be spent on more pressing priorities such as building revenue or serving customers. By outsourcing to a reputable provider, owners have more time to focus on what matters most to them.
Prevents mistakes
By hiring professionals that entail expertise in the field of payroll and whose sole responsibility and focus is payroll, companies mitigate the chances of errors occurring, deadlines not being met, omissions arising, or late payroll tax filings happening. For the employer, payroll errors can cause fines and penalties for improperly calculated tax obligations. Generally speaking, business owners are not experts in the complicated world of government tax regulations. Mistakes can lead to audits and penalties – situations no business wants to find themselves in. Therefore, given all the complicated tasks and the potential for mistakes, processing payroll on your own may cost you more in the long run than what you may save initially.
Minimises expenses
Outsourcing payroll prevents your business from having to hire an expert in the field. This reduces overhead costs. As well as this, a company saves money by saving time. Employees need to be paid for their hours of work and by hiring an affordable full-service provider, this can be avoided. Outsourcing payroll can also help quantify visible and hidden costs around payroll management.
Compliance guarantee
Payroll is a complex and risky operation. Evidently, it can be very challenging and difficult if you do not have the expertise in this field. Federal, state, and local payroll tax are becoming more and more detailed which suggests that payroll departments need to pay close attention detail. By lacking the necessary research with regards to payroll legislation, your company risks calculating or filing your payroll taxes incorrectly or late, which can lead to major problems. Outsourced payroll providers are on top of labour code and legislations, making it easier for employers to remain compliant.
Speed
Since payroll providers are solely responsible for this domain, they can dedicate time to resolving any questions or issues employees may have, which can lead to quicker response times. Furthermore, as payroll specialists, they can process even the most complex payrolls at great speed, providing a quick turnaround time on your payroll when required.
Enhanced security of payroll data
Payroll procedures are complex and potentially a risky business operation. Even with trusted partners, there is always the risk of identity theft, embezzlement, or tampering with company records for personal gain. Consequently, outsourcing payroll to a stable and experienced provider can offer a “safe heaven” for your confidential payroll data. As well as this, redundant backups can be created and it goes without say that payroll providers usually invest in state-of-the-art systems for storing and protecting data, simply due to the fact that it is part of the service provided to clients.
To have all of these benefits contact the Fairfax team for more information and to receive an no obligation quote of an outsourced payroll solution specifically for your organisation email; accounts@fairfaxyeaman.com or call +357 25558025, 0ur expert team will be happy to help!
