Things to Consider while Paying Your Employees in the European Union


There is a minimum wage policy that is followed by all the European Union countries, which promote all the companies (private and public) that are in the national level to influence their employees’ pay package. There remain commitments as well as quite a few recommendations which arise from the Euro Plus Pact Commitments of 2011 as well as the European Commission.

These pacts are key forces for protecting the European Union’s supranational interests with respect to improvements in the payment of the states which constitute the European Union.

Here are the top 5 things you should be considering while making a payment to your employees in the European Union:

1.    Frequency in Requirements and Reporting:

Every country who is a member state of the European Union always has a set of specific requirements with regards to the type of details and facts that are to be reported, and the frequency with which it should be reported. In some of the countries, all the employers are required to keep the figures always updated and report this information to all the authorities which undertake these works on a monthly basis. In some other countries, reporting to the Government is a far less hassle since it is required to be reported on an annual basis.

2.    Employee Benefits and Leave Entitlements:

Employee benefits, encompassing all the paid holidays and annual leave also varies from each country and each region of Europe. There has been an influence with regard to unionization, combined with the European Works Councils has to be taken in consideration, especially when in some nations, they are free to shape every minute thing in the offices, starting from the rate of payment, to the holidays, and even a minute and unnecessary detail in which the office is arranged. A differing note of public holidays in the European countries might sometimes impact on the processing of the payroll since in these cases, the payroll has to be given early sometimes.

3.    Security in Data:

Data security is something where Europe has a stark contrast with respect to the United States, on a cultural basis. Their principle for the collection and exchange of free data is a normal thing in the United States, which in turn makes the entire procedure of payroll management much easier. In the European countries, the legislation for protecting data is extremely rigorous, and a huge amount of compliance is an expectation which is required from all the companies which are non-European Union and which operate in the regions.

The GDPR or the General Data Protection Regulation applies to all the organizations which are based in the EU or any of those which deal with the information of any citizen of Europe. It also asks the managers of payroll to assess the employee’s personal data, collect that, and to corroborate that it is stored in an adequate manner and can provide access to authorized personnel only. All the sensitive personal information has to be updated and all the organizations are required to have a Data Protection Officer. Any breach shall have to be deposited within the course of seventy-two hours.

4.    Income Tax Apparatus:

Europe has a variety of Payroll and tax regimes which exist within the member countries, and even the states have a lot of variances between them.

Despite that lack of a uniform, the payroll and tax services systems in the European Union do not involve the employers when it comes for instance, to the French or Italian tax collectors, which mainly collect the taxes from the employees on a yearly basis in arrears.

However, many ways have been introduced to reduce the taxation and the gap between what the employers pay and what the employee receive.

Furthermore, with every month end, the employers are required to fill in a complete filing of their firms on the internet, with the corporate tax center locally. Some groups of employees also get a specific tax benefit.

5.    Management in Payroll on a Day-to-Day Basis:

The frequency by which the payment is required to run alongside the indispensable tasks like the creation of payslips, might make it a little difficult to calculate the payroll in the European countries. It is a norm in Europe, to run payroll on a monthly basis. However, in different industries such as the hospitality and the agriculture industry, payroll on a bi-weekly basis can be considered as a standard measurement. The sole requirement of excess or additional runs in payment makes a forced decision on the managers in payroll, who in turn makes the entire calculations from gross to net on a more frequent basis. In Europe, payslips are required by the law, and a certain amount of information is extremely mandatory in a manner similar to the United States.


Since the member nations of the EU are in some manner unified with respect to payroll and Human Resource and they obviously vary starting from the way they take the implementation of the directives and ending with all the disclosure requirements of the Government.

We hope this article helps you with all your queries with respect to the payment schemes to your employees in the European Union countries.