What services do I offer?
- Calculation of wages and taxes (personal income tax and mandatory social security contributions).
- Preparation of working time tables and wages calculation sheets (payslips).
- Preparation of employer's report, statement (report) on amounts paid out to natural persons and preparation of other reports.
- Management of employees data (Personal Account Cards).
- Payment order preparation.
- Calculation of vacation payment.
- Calculation of illness (sickness) payment.
- Accounting of business trips and calculation of daily allowances.
- Preparation of employment contracts, orders, statements.
What is the payroll calculation process?
- Data accumulation. During a month must write (record) working hours of employees. Also must record (write) sickness and vacation time.
- Data collection. Must sum accumulated data for each employee. How many days (hours) each employee worked, was ill, used a vacation.
- According to the aggregated data, I calculate salary, sick pay, holiday pay for each employee. Also I calculate taxes.
Reasons why it may be useful to use outsourced payroll services?
- If there is a need to keep in secret the salary data of each employee. The outsourced accountant is independent and has less contacts with company employees. Therefore, there is a greater possibility to ensure confidentiality of the information about amounts of wages (salaries).
- It is possible relatively simply to separate the calculation of wages from other financial accounting activities (recording of issued and received invoices). Salary calculation and recording of invoices not interdependent activities. The outsourced accountant collects data on wages and related taxes (creates accounting records) that can be simply included (imported) in the accounting ledger.
What information is needed to calculate wages?
- Personal data of each employee: name, surname, personal identity number, birth date.
- Information about the position of each employee, the amount of wages (hourly rate, piecework wage or amount of monthly salary).
- Information on the exemptions for each employee and the amount of the non-taxable minimum (data from the Electronic Declaration System).
- The working time (hours, days) of each employee and the duration of the leave (vacation) and incapacity to work (illness) during a month.
- Duration of overtime and night work (usually from 22:00 to 06:00).
Types of wages and salaries in Latvia.Taking into account part 1, article 62 of the Labour law, can make a conclusion that in Latvia are following types of wages and salaries:
- Time wage system. The salary is calculated according to the actual working hours, regardless of the amount of work done (performed). An hourly rate and monthly salary may be set (for example, monthly salary during normal working hours).
- Piecework wage system. The salary is calculated according to the amount of work done (carried out), regardless of the time in which the work is completed.
Gross and net wages.The gross salary (also known as salary on paper) is the amount of salary before deduction of taxes. The statutory minimum wage is the gross salary.
The net salary (also called salary on hands) is the amount of salary received by an employee. To get net salary must deduct all taxes (personal income tax and state social insurance mandatory contributions) from gross salary.
Some of employers' obligations in relation to wages (salaries).
- The employer must count (record) the hours worked by the employee (must prepare a working time table).
- If for a company is set the shift work, then the employer has an obligation to introduce staff with shift schedules. If the summed working time is set, then the employer informs employees about it in writing and presents the work schedule.
- When paying wages, the employer issues the calculation of wages and taxes. If the employee requests an explanation, the employer has an obligation to explain the calculation.
- Also, an employer has an obligation within certain time limits to submit an employer's reports and other information to the State Revenue Service.
Employee-related payments deadlines.
- To pay wages to employees within the term specified in the employment contract.
- Pay Personal Income Tax (tax on salaries). If an employer pays the salary in cash, then the salary tax must be paid no later than one day after the salary payment. If an employer pays the salary by bank transfer, the salary tax must be paid on the same day.
- An employer must pay State Social Insurance Mandatory Contributions during the term set by the State Revenue Service (SRS) (SRS sends special notification).
- The business risk fee must pay until 15th day of the next month.
How much does payroll services cost?The price is approximate and may increase depending on the circumstances (for example, frequent changes of employees). The basic price is set at € 5 per employee per month (minimum price per month - € 30).
Paying the above mentioned price you will get following services:
- preparation of a working time table,
- preparation of wages and taxes calculation,
- preparation of the employer's report,
- preparation of statements, reports, information about employees to be submitted to the SRS,
- preparation and maintenance of a personal account card.