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Payroll compliance
and how to avoid the
pitfalls
Deloitte Shared
Services, GBS &
BPO Conference
Berlin, Germany
Rebecca Mullins & Eira Jones,
Deloitte
22 – 23 September 2015
Introductions
Types of compliance
The potential impacts of non-compliance
What determines success?
Good practice
Agenda
2 Deloitte Shared Services, GBS & BPO Conference 2015
Payroll Compliance Introductions
3 Deloitte Shared Services, GBS & BPO Conference 2015
I have over 18 years’ Payroll consulting experience. A Fellow
of the CIPP and named in Payroll World’s Top 50
professionals in 2015, I lead our UK Consulting Payroll
capability and have a wide breadth of experience.
I have project-managed many stand alone Payroll projects
and the Payroll aspects of large scale global transformations.
My expertise in all areas of Payroll (including employee
benefits, expenses and statutory reporting) has been gained
through working both vendor and client-side on projects
which have involved function reviews, global risk and
compliance assessments, requirements gathering and
documentation, vendor selection and product evaluation.
I am a employment tax adviser specialising in the design,
delivery and taxation of employee remuneration. With over 14
years’ experience in working with multinational organisations, I
have extensive experience in advising clients on the
development of processes and controls to support
employment tax compliance both inside and outside the
shared service environment and within and without the Payroll
function.
My current focus is on supporting organisations to develop the
capability of Payroll functions in relation to employment tax
knowledge, controls and processes both in the UK and
globally.
Rebecca Mullins
Senior Manager,
Consulting
Eira Jones
Director, Tax
Types of compliance
Deloitte Shared Services, GBS & BPO Conference 2015 4
Payroll Compliance
INTERNATIONAL
REQUIREMENTS GOVERNMENT
INTERNAL
THIRD PARTY
DATA REGULATORS
VENDOR
ETHICAL There are many
different types of
compliance
requirements that
organisations need
to meet.
The potential impacts of non-compliance
Deloitte Shared Services, GBS & BPO Conference 2015 5
Payroll Compliance
Penalties Fines
Sanctions
Some interesting (random) facts
Deloitte Shared Services, GBS & BPO Conference 2015 6
Payroll Compliance
27%
€8.4m
£883k
10%
Payroll Fraud happens in 27 percent of all businesses, with the average instance lasting about 36 months
In 2014 an Airline was ordered to pay more than €8.4m for incorrectly employing staff working in France on
overseas contracts
In 2015, 48 UK employers were named, shamed, fined and had to make back-payments for failing to pay the
National Minimum Wage. It cost them £883k
If your federal employment tax deposit is one to five days late, the IRS imposes a 2 percent penalty of the
amount due, rising to 10 percent if sixteen days late
Males with at least five years’ service are most likely to commit Payroll fraud
What determines success?
Deloitte Shared Services, GBS & BPO Conference 2015 7
Payroll Compliance
Vendors
People
Process
Data
Systems
Good practice
combines all of these
aspects with
allocation of
responsibilities,
controls and
oversight
Good practice - people
Deloitte Shared Services, GBS & BPO Conference 2015 8
Payroll Compliance
Training
Roles and
Responsibilities
.
Training
Empowerment
Good practice - process
Deloitte Shared Services, GBS & BPO Conference 2015 9
Payroll Compliance
Contain
Controls
Documented
Current
Owned Followed
Good practice - data
Deloitte Shared Services, GBS & BPO Conference 2015 10
Payroll Compliance
Audited
Documented
Owned
Secure
Secure
Audited.
Owned.
Current Documented
Good practice – systems
Deloitte Shared Services, GBS & BPO Conference 2015 11
Payroll Compliance
Fit for
purpose
Controls
Documented
Automated
controls
Compliant
Documented
Fit for
Purpose
Automated
Good practice - vendors
Deloitte Shared Services, GBS & BPO Conference 2015 12
Payroll Compliance
Roles and
Responsibilities
Documented
Engaged
Accountable
Good practice
Deloitte Shared Services, GBS & BPO Conference 2015 13
Payroll Compliance
Vendors
People
Process
Data
Systems
Proactively
manage risk,
anticipate change
and achieve the
right level of
oversight
Questions
Deloitte Shared Services, GBS & BPO Conference 2015 14
Payroll Compliance
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, and its network of member firms,
each of which is a legally separate and independent entity. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and
its member firms.
Deloitte LLP is the United Kingdom member firm of DTTL.
This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will
depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of
the contents of this publication. Deloitte LLP would be pleased to advise readers on how to apply the principles set out in this publication to their specific
circumstances. Deloitte LLP accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material
in this publication.
© 2015 Deloitte LLP. All rights reserved.
Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street
Square, London EC4A 3BZ, United Kingdom. Tel: +44 (0) 20 7936 3000 Fax: +44 (0) 20 7583 1198.
15 Deloitte Shared Services, GBS & BPO Conference 2015