Accountancy and payroll services are similar in the sense that both are related to finances at your Hungarian company. Sometimes both services are provided by the same provider too. However, they are distinct functions, requiring special expertise.
Accounting involves mostly external relations
Accounting services focus mostly on the relationship between your Hungarian company and other entities, whether they are partners or authorities. Your accountant will record incoming and outgoing invoices, calculate VAT and other taxes your company must pay to the Tax Authority based on your income, and create monthly, quarterly, and yearly reports for you and the authorities.
Click here to read more about the typical tasks of an accountant.
Payroll involves mostly internal relations
Payroll services focus mostly on the relationship between your Hungarian company and your employees. Your payroll specialist will register working time, create reports for you and for the authorities, and calculate how much salary employees should receive and how much tax you should pay the authorities on behalf of your employees and on behalf of the company. The payroll specialist needs to work closely together with the HR function of your company, and they are often responsible for HR related tasks.
Payroll services in a nutshell
Most importantly, your payroll specialist will be the person involved in calculating salaries and submitting reports to the authorities connected to this task.
- The working hours of your employees should be registered, including paid time off and sick leave.
- Payroll taxes should be calculated, which include the personal income tax and the social security contribution you pay to the authorities on behalf of your employees, and the social contribution tax you pay on top of the gross salary.
- If your employees are eligible for any tax benefits, those should be reported and considered during the calculation of taxes and net salaries.
- If you want to provide any bonuses, those need separate agreements before they can be included in calculations.
- Reimbursement of expenses, such as commuting or costs during secondment also goes through payroll.
- If you provide any fringe benefits, those should be considered too.
- If your employee is eligible for any allowances (e.g. for child care, sick leave, maternity leave), application is normally handled by the payroll specialist too, even though these payments are not directly connected to employment and do not come from your company.
On top of these monthly tasks, payroll services are normally involved with onboarding and offboarding employees, which includes registering and deregistering the employment with Hungarian authorities, payroll onboarding to collect the information necessary for monthly payroll, and payroll offboarding to create the exit documents.
As a result of the work of your payroll specialist, at the end of every month, reports will be created for the authorities about employment at your Hungarian company, and you will receive a summary of the payments you are required to make:
- the net salaries of each employee,
- the taxes payable on behalf of each employee,
- the taxes payable after each employee.
Compliance in accounting and payroll services
Both in accountancy and payroll, compliance with Hungarian regulations is an essential aspect. Your accountant and payroll specialist both need to be aware of current regulations (and occasionally, changes to regulations), and use up-to-date, licensed software to perform daily tasks.
At Helpers, both accounting and payroll services are performed by our subsidiary, Helpers Finance. This way we can offer comprehensive business solutions to the companies we help set up, supporting foreign business owners in Hungary throughout their entire operation.
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