How do payslips work in France, Switzerland and the United Kingdom?

Introduction

In the complex field of finance, it is essential to have a good handle on salaries and payslips. Whether managing French, Swiss or British systems, understanding the components of payslips guarantees financial transparency and compliance with regulations. For this, Euro Accounting, under the direction of Shabir Djakiodine in Paris , Geneva , London and Birmingham , offers a wide range of accounting services. Its experts excel in the French, Swiss and English intricacies of accounting, taxation and payroll. Moreover, they offer tailor-made solutions for companies in these three European countries but also in the vast majority of European countries (Spain, Portugal, Luxembourg, Germany, Italy, Croatia, etc.). Thus, this article explores the elements of the payslip in these three countries (France, Switzerland and GB). It highlights the importance of financial education and tax and social compliance for accurate payments and financial awareness. The ultimate goal of this guide is to empower individuals to navigate the complexities of payroll and taxation.

To get started… Euro Accounting

Euro Accounting , headed by Shabir Djakiodine , is a “multi awards” accounting firm which offers various services to entrepreneurs and businesses. The firm and its director Shabir Djakiodine were finalists as well as winners on numerous occasions, both at national and regional.

Shabir Djakiodine: awards

Shabir Djakiodine has won the following awards:

• Outstanding Entrepreneur of the Year 2023 with Best Business Awards (national level)
• Entrepreneur of the Year 2023 with Birmingham Awards (regional level)
• Businessman of the Year 2022 with SME National Business Awards (national level)
• Entrepreneur of the Year 2022 with the famous CEO Review magazine

And Finalist,

• Entrepreneur of the Year 2023 with Great British Entrepreneur Awards (national level)
• Businessman of the Year 2023 with SME National Business Awards at (national level)
• Businessman of the year 2023 with Birmingham Awards (regional level)

Our Euro-Accounting firm: awards

The Euro Accounting firm won:

• Diversity, Equality and Inclusion 2023 with Best Business Awards (national level)
• Best Accounting & Company Incorporation Service Provider 2023 with Midlands Enterprise Awards (regional level)

The Euro Accounting firm came as a finalist:

• International Business of the Year 2023 with Commonwealth Business Excellence Awards (at Commonwealth level)
• Employer of the Year 2023 with SME National Business Awards (national level)
• Diversity and Inclusion 2023 with Federation of Small Businesses (national level)
• Business of the Year 2022 with SME National Business Awards (national level)
• Best tax team of the year 2022 with Accounting Excellence (national level)
• Employer of the Year 2022 with SME National Business Awards (national level)
• International Business of the Year 2022 with Federation of Small Businesses (regional level)
• Best organization for business culture 2022 with Business Culture Awards (national level)
• Corporate Culture Team 2022 with Business Culture Awards (national level)
• Best small organization of less than 50 employees 2022 with Business Culture Awards (national level)
• Best organization for business culture 2021 with Business Culture Awards (national level)
• Best international organization for business culture 2021 with Business Culture Awards (national level)
• Employer of the Year 2021 with Investors In People (nationally)

Our team

In short, our multilingual team excels at simplifying complex concepts and prioritizing customer satisfaction. Our services offered include company formation, assistance in opening bank accounts, accounting, tax management and much more. The team stays abreast of legal and tax developments and offers accurate advice. Additionally, we are a multilingual team dedicated to simplifying financial complexity for our clients, placing their satisfaction at the heart of our mission. Our services, ranging from company creation to tax management, are supported by exceptional expertise and constant vigilance to legal developments. So, with Euro Accounting, you have a trusted partner for the success of your financial projects. Euro Accounting extends its services to human resources, salary management, assistance during tax audits, consolidation and internal audits.

Payslips: definition

What is a payslip?

The payslip is an essential document distributed by employers to employees at the end of each pay cycle. It turns out to be crucial for both parties. It provides a complete distribution of an employee’s earnings, deductions, and net income for that specific period. Thus, it promotes financial transparency and the recording of work-related financial and social activities. The main elements of a typical payslip present the name, identification or payroll number and contact details of the employee. In addition, the “income” section describes the sources of income, namely regular salaries, overtime, bonuses and commissions. In addition, detailed deductions cover taxes, social security contributions , pension deductions . , health insurance premiums, and specific items such as loan payments. Of course, some pay stubs may contain additional information, such as employer contact information, pay period dates, and annual totals. . They thus offer an overview of income and deductions throughout the year.

Importance of payslips

First of all, pay stubs are crucial for several reasons. They ensure transparency by detailing remuneration, taxes and deductions. In fact, they allow employees to manage their finances and check their tax returns. They also serve as an audit tool to monitor payments related to work performed. Additionally, they help with legal compliance, proving that employers are following labor laws . Hence, these essential documents are provided in physical or electronic format. They play a vital role in the compensation process of organizations. They also guarantee precise and consistent compensation for employees.

Legal requirements

Then, these sheets, subject to legal standards, ensure transparency, pay equity and tax and legal compliance. They include details on employees, employers, pay periods, income (salary, overtime, bonuses), deductions (taxes, social security, insurance) and net pay. Likewise, employers must respect local labor laws , maintain data confidentiality. They must also meet delivery and accessibility requirements. Any breach may result in legal sanctions. It is imperative that they stay up to date with local regulations regarding pay stubs. This is done by consulting legal experts or relevant authorities to ensure compliance.

The components of payslips

Employee information

Payslips contain essential information for employee identification and file management. This includes the employee’s full name, unique payroll numbers, current address, and contact information such as phone numbers and email addresses. In some regions, sensitive data like Social Security or Tax ID numbers may be required for tax purposes. Employment information, such as position, supplements payslips. Accurate and up-to-date information is essential for compliance with tax and social security regulations. Thus, the personal financial management of employees is particularly acquired. The content of payslips and the information contained therein may vary depending on the country.

Remuneration

To begin, let’s look at earnings, which is one of the essential elements of a payslip. They are listed in detail on this document and represent the different sources of an employee’s income during the specified pay period. Generally, these incomes are classified and detailed as follows:

Normal salary

First of all, regular wages are the standard hourly or salary remuneration an employee receives for their normal working hours. Generally, it is relative to their usual rate of pay. This salary is the essential element of an employee’s remuneration. It is calculated based on their usual working hours and their usual rate of pay.

Overtime pay

Next, overtime pay. It is additional compensation paid to an employee for hours worked beyond their normal working hours or beyond a predetermined threshold. Overtime rates and regulations may vary depending on jurisdiction and employment contract and can range from time and a half (1.5 times the regular rate of pay) to double time ( 2 times the normal rate of pay) for overtime worked.

pay. Whereas monthly paychecks offer larger sums, but less frequent access to income.

Payroll Schedules

Third, employers typically establish a payroll calendar to plan pay periods and dates. This indicates when employees should expect to receive their salary, deadlines for submitting time cards or other payroll information. The same goes for the processing schedule for payroll services. Payroll schedules help ensure consistency and accuracy in paying employees.

Gross salary and net salary

Regarding gross salary and net salary, these are fundamental concepts in payslips. They represent different aspects of an employee’s remuneration. Let us then explain these terms.

Calculation of gross salary

On the one hand, gross salary is the total earnings received by an employee before any deduction or withholding. This is the starting point for calculating an employee’s remuneration. Additionally, it includes all forms of income, such as regular salary, overtime pay, bonuses, commissions and other earnings. Gross salary is the amount an employee would receive if there were no deductions. Calculating gross salary involves adding all these sources of income for the pay period.

Calculation of net salary

On the other hand, net salary is the amount an employee receives after reducing all deductions and withholdings from their gross salary. This is the actual amount the employee will receive in their bank account or in the form of a paycheck. Take-home pay represents the money an employee can use for personal expenses, savings, and other financial needs.

French payslips

Understanding payslips in France can be a difficult task due to its complex details. Then, explaining its components can be just as perplexing. Although France does not have the highest income tax rates in Europe , it bears one of the largest burdens in terms of social security contributions. This, for both employers and employees, as evidenced by the numerous deductions appearing on payslips. To simplify, a standard French payslip is broken down into three key parts. Each plays a crucial role in understanding its content.

The top of the sheet

First, the upper part has three parts. First, the company data including essential information such as company name, address, SIRET number (registration number), NAF code (data code). activity) and the URSSAF/MSA number (Social Security registration number). Secondly, the employee’s data interpreting various factors. His identification in the company, his social security number, his bank details, his function, his professional status, his position, his coefficient, his date of entry into office, his seniority and his collective agreement. Thirdly, the data the payslip specifying the pay period, the payment date and the validity of the employment contract.

The heart of the newsletter

Then, the heart of the payslip presented in columns, is made up of three main sections. Payroll elements, actual calculations (base rate, rates, deductions and payments) and employer contributions. In addition, the lines of the payslip are divided into three parts. Gross salary, social security contributions (including health, work accident, retirement, family allowances, unemployment insurance and other specific contributions) and other employer contributions. On the other hand, payslips end with the net part. They follow the structure of the gross salary part and include various calculations. These such as refunds and withholding tax implemented in 2019.

The lower part of the plug

Finally, the lower part of the payslips encompassing three elements. Monthly and annual summaries, “leave” (counts of vacation days acquired, used and remaining) and the final net payment section, including the date and method of payment. Please note that it is imperative to understand the presentation and elements of French payslips due to the complexity of the country’s social security and tax systems. These involve numerous contributions and deductions for employees and employers.

Swiss payslips

Furthermore, managing salaries in Switzerland involves dealing with a complex tax system. The latter includes federal, cantonal and municipal components. However, employers in Switzerland generally have limited responsibilities when it comes to withholding income tax. This simplifies salary processing. In fact, foreign employers must comply with various obligations. As an example, we mention affiliation with Swiss old-age, survivor and disability insurance, membership in a professional pension fund, and professional and non-professional accident insurance. It is necessary to register with the cantonal fund Family Allowances. In Switzerland, withholding tax is generally minimal, except for temporary residents. Employers may offer supplemental health insurance, but health coverage remains the responsibility of each employee. Income is subject to federal, cantonal and municipal tax. In addition, contributions from employees and employers finance the social security system.

Tax Considerations

First, tax considerations include progressive federal and cantonal tax rates and varying rates between different cantons. Taxable income includes all forms of employment-related remuneration, with specific deductions applicable. Separate tax rules apply to resident and non-resident/cross-border employees.

Tax withholding and reporting

Second, employers do not withhold income tax at source. Foreign employees who temporarily reside and work in Switzerland can have income tax deducted directly from their salary. It is the responsibility of employers to issue annual salary certificates to employees to facilitate the tax filing process.

Social security contributions

Third, Switzerland’s social security system includes several insurances: old age, unemployment and work accidents. Employers and employees share contributions for certain insurance between them. This is subject to specific income thresholds and exemptions. Reporting and payment schedules vary depending on the type of insurance and employer status. Swiss employees enjoy various benefits, including annual leave, maternity leave, holidays, paternity leave and sick leave. Although Switzerland does not have a national minimum wage, several cantons have established their own minimum wage standards. In addition, the law defines the limits that authorize overtime.

Payroll requirements

Fourth, salary processing in Switzerland is mandatory on a monthly cycle. And, payments are usually expected at the end of the month. Typically, they are transmitted via bank transfers in Swiss francs. Therefore, employers are required to provide employees with complete payslips. They come in digital or paper form, including essential details such as pay period, personal information, gross salary, social security contributions and other relevant data. Additionally, it is essential that employers retain payroll records for at least ten years to ensure compliance and accuracy of record keeping.

British payslips

Payslips in the UK are essential for employees to understand their remuneration and the deductions made from their salary. Here is some important information that is usually included in a UK payslip: A UK payslip must contain essential information including gross pay, net pay, variable deductions (such as tax and national insurance), “self-enrolment” (pension). It may also include details such as codes which determine withholding tax, national insurance numbers, pay rates, and additional payments such as overtime. Regularly checking the payslip is essential to ensure that it complies with the latest tax information.

Important concepts on the payslip

• Gross salary:This is the total amount before any deductions, including taxes and social security contributions.
• Net Salary:This is the amount the employee will actually receive after all deductions.
• Income tax:The amount of income tax deducted at source is indicated on the payslip. The employee’s personal tax code is also included.
• National Insurance:Deductions for National Insurance, which funds the social security system in the UK, are also specified.
• Self-enrollment (pension):If the employee participates in a company pension plan, details of their contribution and that of the employer are usually indicated.
• National Insurance Number:Every individual in the UK has a National Insurance number, and this number is usually included on the payslip.
• Overtime:If the employee has worked overtime, it is generally detailed on the payslip, along with the applicable rate of pay.
• Additional payments:Any additional remuneration, such as bonuses or benefits in kind, is also mentioned.
• Variable deductions:In addition to income tax and national insurance, other variable deductions, such as student loan repayments, may be included if they apply to the employee.

Personal information and payroll number

Your payslip begins with your personal details, usually your name and sometimes your address. Many companies assign unique payroll numbers to their employees for identification purposes in the payroll system.

Date, period and tax code

Payslips may show the date your payment can be credited to your bank account. The tax period number is essential for tax calculation. For example, if you are paid monthly, “01” represents the month of April and “12” represents the month of March. Your tax code, provided by HM Revenue & Customs ( HMRC ), tells your employer how much of your income should be exempt from tax before any deductions can be made. Ensuring your tax code is accurate is essential to avoid paying too much or too little tax.

National Insurance Number

This unique identifier is essential for working in the UK. It remains constant throughout life and allows contributions to state benefits such as pensions to be tracked.

Payments, salaries, bonuses and commissions

This section displays your income before deductions, possibly including the calculation of your salary, hourly rate and any additional payments such as bonuses or overtime.

Expenses, deductions – taxes and national insurance

Some employers pay owed expenses through payroll. Indeed, they can be detailed separately or combined into taxable or non-taxable amounts. As such, variable deductions, such as tax and national insurance, are highlighted for the sake of transparency.

Pensions

If you contribute to a workplace pension scheme, the amount is detailed and employer contributions may also be shown.

Student loan

If you are repaying a student loan, this will appear on your payslips, with instructions from HMRC for the correct amount to be withheld.

Court orders and alimony

In cases where court decisions require deductions from your salary for unpaid fines or debt repayments, this will be indicated. The child support service’s wage deduction order may likewise be included.

Allowances

The details of sick pay vary depending on the length of your illness and your employer’s sick pay policy. Statutory sick pay, as well as any sick pay, can be detailed here. If you are on maternity, paternity or adoption leave, your payslips will show the relevant payments, including shared parental pay or additional legal paternity compensation, if applicable.

Workplace Benefits

Benefits such as health insurance or company car shown, and may impact your tax code. Other benefits, such as subscription loans or charitable donations, may also appear.

Other deductions

Any additional deductions, such as union dues, are presented for transparency.

Summary of the past year and net salary

Your payslips can summarize your income, your tax payments, your national insurance contributions. It also summarizes your student loan repayments and retirement contributions for the current financial year. These last from April 6 to 5. Your net salary, that is to say the amount remaining after all deductions, is highlighted. We advise you to verify the accuracy of this figure with your bank statement.

Conclusion: payslips

In the world of finance, knowledge is power. Understanding the intricacies of pay stubs and salaries isn’t just a matter of financial education. It’s also about transparency, compliance and financial security. This guide takes you on a journey through the payslip landscapes of France, Switzerland and the United Kingdom. We then highlight the unique characteristics of each system. Euro Accounting, with its accounting and payroll expertise, illustrates the value of professional assistance in navigating these complexities. With this knowledge, individuals and businesses can manage their finances with confidence. In addition to this, they ensure compliance with local tax and labor regulations. Likewise, they make informed decisions. Empowerment through understanding – this is the key to financial success in today’s complex financial world.www.euro-accounting info@euro-accounting.com +44 (0) 778 986 2405+33( 7) 7 56 91 93 32