Alight Publications’ Finding That Europe’s Payroll Processes Are a Challenge
Mandatory deductions, social security calculations and reporting requirements among key factors found in most complex countries, with majority located in Europe
Despite recent simplifications in the United States, challenges persist across multi-state payroll environments, making it the fourteenth most complicated country for payroll
Alight,a leading cloud-based human capital technology and services provider revealed the findings of the 2023 Alight Global Payroll Complexity Index (GPCI): Top 40 Countries for Payroll Complexity. According to Alight’s research, the 10 countries with the highest degree of payroll complexity are:
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- France, which retains its position as the most complex country for payroll processing with a 10% increase in complexity score compared to the 2021 GPCI.
- Germany
- Switzerland
- Italy
- Canada
- Poland
- Turkey
- Netherlands
- Belgium
- Slovakia
The GPCI notes the ten countries most impacted are 29% more complex due to three key factors required in their payroll processes; mandatory deductions, social security calculations and types of governmental mandatory reporting. The study also demonstrates an increase in complexity among governments that have implemented new payroll requirements to support employees’ rights and wellbeing.
“Each country has unique payroll structures, regulations and requirements, making it increasingly difficult for multi-national organizations to stay apprised of changing payroll regulations and evolving employee needs,” said Cesar Jelvez, Chief Professional Services and Global Payroll Officer at Alight. “Organizations that lack the agility to deliver an effective payroll process are at risk of reputational damage, payroll errors, non-compliance, and failures when it comes to ensuring employee wellbeing.”
Compared to its 2021 ranking, the U.S. has decreased in complexity by four points, moving out of the top 10 and into the fourteenth spot in 2023. However, despite recent simplifications in payroll processes, challenges persist, particularly in multi-state employment scenarios.
The 2023 study highlights the workplace evolution on payroll since the 2021 GPCI and the progress made by organizations to manage payroll complexity. Organizations have demonstrated that by investing in payroll strategies and technologies to support employee-led cultures with earned wage access, transparent calculations and diverse benefits, they are able to simplify their infrastructure. As a result of these types of investments, the 2023 GPCI shows a 6% reduction in payroll complexity compared to 2021, driven by technology and process innovations.
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“Multi-national companies face considerable complexity in managing global payroll and having a partner that can help them standardize and simplify payroll processes across countries is indispensable,” said Jelvez “Alight’s expertise in global payroll combined with our ability to integrate into a single platform, provides employers with the data and analytics capabilities they need to drive a differentiated payroll experience with measurable outcomes.”
The 2023 Alight Global Payroll Complexity Index (GPCI): Top 40 Countries for Payroll Complexity is a biennial benchmarking survey that ranks the complexity of payroll processes in the top 40 countries of the nearly 200 countries were Alight processes payroll. The report examines crucial payroll requirements across countries including tax regulations, mandatory deductions, social security contributions and reporting requirements.
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