Organisations report international employment costs and the associated taxes – i.e. shadow payroll tax – to relevant authorities in two ways. Initially via payroll, where they report the tax calculated and paid on behalf of their employees; and then through the accounting department, reflecting the costs that have been charged in their financial statements and corporate tax returns.
While seemingly OK on paper, this can be problematic in practice as payroll and accounting functions typically use different operational systems which are not reconciled to each other. As a result, organisations don’t know whether their financial statements accurately match their employment tax filing and have limited or no visibility to the future tax liabilities that they may be building up in this area.
When data is inconsistent and inaccurate, it can result in financial penalties and a tarnished reputation when audited. This is compounded by the fact that this process may take several years to complete, with significant additional time and effort spent trying to reconcile differences and resolve the issue. All of which eats into your business productivity and profitability.
Certino calculates shadow payroll tax and processes accounting and rebilling entries using the same dataset. So, you can be confident of consistent, accurate results from the outset, and benefit from the time and cost savings, as well as the compliance this ensures.
Everything is easy and automated, and you receive a fully auditable history of international employment costs and all reported shadow payroll tax activity in one place. As such, you can quickly and easily provide a breakdown and analysis on-demand, across your payroll and accounting functions.
It’s all part of Certino’s mission to ‘get shadow payroll right first time’. Because this process is ongoing, you’re never left vulnerable and always enjoy an optimised tax position with minimised tax liabilities and alignment between your payroll reporting and accounting.
Certino is here to discuss your international tax challenges, and help you optimise your shadow payroll, so please do get in touch if you’d like to discuss any of the points above.