Document Your Payroll in These 5 Key Steps
Just been told to take over another country’s payroll and have no clue how to do it? Don’t panic, we’ve got you covered.
Managing a new country’s payroll can feel overwhelming, but with the right approach, you can get up to speed quickly. Here’s a structured five-step method to document payroll effectively, ensuring compliance and efficiency.
Step 1: Online Research
Start with online research to get a basic understanding of the country’s labour regulations. This not only helps you grasp the fundamentals but also leaves a good first impression on the person handing over the payroll to you.
Where to look:
Ministry of Labour website
Social security administration
Tax office and other government portals
Payroll associations or professional bodies (if available)
Industry reports or white papers specific to payroll and employment in that country
Use your browser’s built-in translator if the resources aren’t available in English. Additionally, check out this resource I’ve compiled: International Payroll Compliance.
When reviewing official sources, take note of the following:
Standard payroll cycle (monthly, bi-weekly, weekly)
Tax brackets and deductions
Social security contributions
Employer obligations and deadlines
By gathering this preliminary knowledge, you’ll be able to have more productive discussions during the handover.
Step 2: Questionnaire
Before diving into discussions, prepare a structured questionnaire to guide the handover process. This will ensure that you capture all relevant information.
Break it down into three key sections:
1. Basics:
Country and legal entity
Number of employees covered by the payroll
Internal and external stakeholders involved
Payroll provider (in-house, outsourced, or hybrid model)
Bank and payment processing details
2. Regulations:
Key labour laws affecting payroll (e.g., working hours, overtime, leave policies)
Time & attendance rules (e.g., clock-in systems, overtime approval process)
Compensation & benefits structure (e.g., statutory vs. voluntary benefits)
Mandatory deductions (e.g., income tax, pension, social security, union fees)
Payroll cut-off dates and compliance requirements
3. Processes:
Payroll input collection (who provides what and when)
Payroll processing steps (calculations, approvals, exception handling)
Output review (payslips, reports, reconciliations)
Approval and sign-off procedures
Payment and reporting deadlines
A well-structured questionnaire acts as a roadmap, helping you uncover critical chain links in the payroll process.
Additionally, consider tailoring follow-up questions based on the payroll complexity. For example:
How are corrections and retroactive payments handled?
Are there special tax treatments for certain employee groups?
How does payroll data integrate with other HR or finance systems?
A thorough questionnaire ensures that no critical information is overlooked, making the transition smoother and reducing the risk of compliance issues.
Step 3: Workshop
Conducting a payroll discovery workshop ensures that you get accurate, first-hand insights from the person handing over payroll.
Before the workshop:
Prefill parts of the questionnaire based on your initial research.
Schedule meetings with the person handing over the payroll to you.
Share the questionnaire in advance so they can familiarise themselves with it.
During the workshop:
Begin with an overview of the methodology and purpose of the questionnaire.
Walk through the questionnaire together, filling in missing details.
Identify action items, owners, and due dates.
Determine if additional stakeholders or sources need to be consulted.
Wrap up with agreed next steps.
After the workshop:
Set up follow-up meetings with any additional stakeholders identified.
Use your notes and session recordings to refine the payroll manual.
Verify unclear or incomplete information with reliable sources.
Start each subsequent session by reviewing outstanding questions and confirming previous takeaways.
Step 4: Payroll Manual
Once your questionnaire is populated with notes, it’s time to turn it into a well-structured payroll manual. This should be more than just a survival guide. It should be clear, concise, and easy to use.
Best practices:
Use spell check – A small but crucial step.
Write in International Business English – Avoid country-specific idioms, e.g., use “Stay focused” instead of “Keep your eye on the ball”.
Be concise but thorough – Use bullet points where possible.
Avoid capturing personal data – Redact or erase personal information in screenshots.
KISS (Keep It Simple, Stupid) – Use straightforward language and only include technical terms when necessary.
A good payroll manual is one that anyone stepping into your role can understand at a glance.
Step 5: Flowcharts
A process flowchart is a visual representation of a payroll process. It outlines who does what and in what order, ensuring that all steps are clear.
Alternative names include: process maps, process flows, structural outlines, and step-by-step diagrams.
Key questions a flowchart answers:
Where does the process start?
What are the process steps?
What source materials and tools are required?
Who is involved in each step?
What are the decision points?
Where does the process end?
By forcing you to arrange the information in a coherent structure, flowcharts help you validate whether you have all necessary details. For payroll processes, swim lane diagrams are the best format — they visually separate responsibilities by team (HR, Payroll, Finance) and by phase (pre-payroll, payroll, post-payroll).
Final Thoughts
Taking over a new country’s payroll might feel daunting, but a structured approach can make the process manageable. By following these five steps you’ll set yourself up for success and ensure smooth payroll operations.