How External Payroll Accounting Improves Compliance

What does compliance in payroll mean?

It means fulfilling all legal obligations—covering social security (AHV), withholding tax, salary continuation, and contributions.

Violations can lead to:

• Back payments to compensation funds
• Fines for withholding tax errors
• Problems during audits by authorities

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Risks of in-house payroll

Many SMEs handle payroll internally, often by non-specialists. This causes:

• Uncertainty on complex topics (pension funds, maternity pay, withholding tax)
• Missed deadlines
• Incorrect insurance classifications

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How external payroll services support compliance

1. Up-to-date expertise

Knowledge of:

• Social security law
• Labour law
• Tax and withholding tax rules
• Industry regulations and collective agreements

2. Meeting deadlines and reporting duties

• On-time reports to funds, insurers, and authorities
• Accurate withholding tax calculations by canton
• Clean year-end statements

3. Risk minimisation

• Complete documentation and archiving
• Support during audits
• Fewer authority queries

4. Accurate payslips and clear communication

• Transparent salary breakdowns
• Reduced employee complaints
• Clear monthly and annual reports

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Example: SME with complex payroll

A construction firm with staff from several cantons faced tax corrections, AHV repayments, and heavy admin. After outsourcing:

• All tax rates applied correctly
• Reports sent on time
• Payroll workload halved

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Conclusion

Payroll is sensitive—errors have legal and financial consequences. External services ensure legal security, efficiency, and trust.

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