Imagine this scenario - Company A manages payroll internally. The accounting team applies last year’s social insurance rates, assuming nothing has changed. he difference on each salary slip is small and goes unnoticed. After several months, the issue is flagged during a routine review. Contributions have been underpaid, corrective filings are required, penalties are imposed, and employees start asking questions. Company A is suddenly dealing with a problem that could have been avoided.
This type of situation is more common than many businesses realise. Payroll is often treated as a simple, recurring task. In reality, it involves constant monitoring of tax rules, labour regulations, and contribution rates. Payroll goes beyond basic salary calculations. It includes income tax, social insurance, general health scheme, and several statutory funds, all of which are subject to change.
The main challenge is not intent or effort. Most payroll errors happen because internal teams are stretched across multiple responsibilities. Payroll becomes one more task among many, handled by a small number of people who are also covering accounting, reporting, and compliance work. When updates are missed or checks are rushed, mistakes follow.
Payroll errors are difficult to manage quietly. Employees notice discrepancies immediately. Corrections take time, and explanations are rarely straightforward. In some cases, errors lead to inspections or formal reviews, adding further pressure on management and finance teams.
There is also the issue of continuity. Internal payroll often depends on one or two individuals who understand the system, the history, and the exceptions. Absences, turnover, or changes in responsibilities can interrupt processes and increase risk. Training replacements or temporary cover is rarely simple.
As companies grow, the situation becomes more complex. New hires, terminations, bonuses, director remuneration, foreign employees, or split arrangements all require careful handling. What worked for a small team can quickly become inadequate as the business evolves.
Data protection adds another layer of responsibility. Payroll data is highly sensitive. Managing access, confidentiality, and compliance with GDPR requires clear rules and consistent discipline. Informal internal handling increases the risk of mistakes or blurred boundaries.
Over time, many businesses reach the same conclusion. Payroll is no longer just an administrative task. It is a function with legal, financial, and reputational implications. Treating it as such is not about outsourcing for convenience. It is about mitigating risks and ensuring that a critical process is handled with the attention it deserves.
Companies that take a step back and reassess how payroll is managed often find that specialist handling brings clarity, stability, and fewer unpleasant surprises.
*Charis Constantinou, Head of Bookkeeping and VAT, PGE&Co
