Companies stumble under burden of ZUS paperwork
"The movie 'Brazil' fits pretty well - it's about a guy who drowns in paperwork," said Mark Westin, finance director for Lynka Promotional Textiles. "In the end he gets sucked up by a bunch of forms and completely disappears."
Prior to pension reform, businesses submitted a single monthly summary report to the Social Insurance Office (ZUS) detailing the total number of employees and the aggregate amount paid to social security for those workers. Under the new pension system, though, companies have to turn in a separate, detailed form for each employee detailing how much every worker earns and the amount going to pension insurance, disability pay, and worker's compensation.
Under the reformed system, an employer pays 22% of a worker's gross salary to ZUS while an employee chips in a nearly equivalent 23%. To make up for the worker's contribution, under the new system the employer must add an additional 23% to an employee's gross salary. Of this pile, 19.52% goes toward pension insurance, 13% towards disability insurance, and about 4.48% toward sickness insurance and workers compensation.
"We had to hire an extra employee just to keep up," Westin said. Since mid-January "both of the people who have been doing payroll have had to stay until eight or nine at night."
Pension overhaul has more than doubled the cost of completing payroll at Lynka, adding an extra zl. 5,000-zl. 10,000 per month, Westin said. He said the amount of paperwork, however, has grown tenfold. At accounting firm KPMG Polska, pension reform has caused the stack of paperwork involved in and time spent completing payroll to jump by 25%, said Malgorzata Sobota, financial controller at KPMG.
This is not what ZUS had intended. The agency planned for the pension changeover to actually generate a decrease in total paperwork, but difficulties arose when the necessary software for businesses to complete the ZUS forms failed to work. "Yes, we had problems," said Franciszek Zalewski, an employee at ZUS's press office. After distributing six different versions of the ZUS software, a final edition was completed during the first week of February.
Due to the delays, "companies were left with additional paperwork at the start of the reform," said Karen Kwiatkowska, a senior manager at accounting firm PricewaterhouseCoopers. She added that eventually this will be eliminated once working software is implemented.
With a functioning edition of the software, companies should be able to file information electronically with ZUS - either via the web or by sending a CD-Rom or disk to ZUS.
But to ease this process, companies must link their payroll program with the new ZUS software - a transaction that will run most businesses $5,000-$10,000, according to software producers. The total amount of business software opportunities as a result of the ZUS reform could amount to as much as $50 million for software producers, according to Ted Tully, vice president of consulting for Wonder Technology Group.
KPMG is using software producer Scala Polska to integrate its payroll system and the ZUS program. The company is dishing out about $5,000 on the reform, with $2,000 going for customizing the software, $1,000 to establish an interface and another $2,000 on overtime and consultant fees.
Wonder Technology Group is also working to create an interface that links company payroll systems with the ZUS software, Tully said. But the business is waiting for the final version of ZUS regulations before completing the software.
Prior to pension reform, businesses submitted a single monthly summary report to the Social Insurance Office (ZUS) detailing the total number of employees and the aggregate amount paid to social security for those workers. Under the new pension system, though, companies have to turn in a separate, detailed form for each employee detailing how much every worker earns and the amount going to pension insurance, disability pay, and worker's compensation.
Under the reformed system, an employer pays 22% of a worker's gross salary to ZUS while an employee chips in a nearly equivalent 23%. To make up for the worker's contribution, under the new system the employer must add an additional 23% to an employee's gross salary. Of this pile, 19.52% goes toward pension insurance, 13% towards disability insurance, and about 4.48% toward sickness insurance and workers compensation.
"We had to hire an extra employee just to keep up," Westin said. Since mid-January "both of the people who have been doing payroll have had to stay until eight or nine at night."
Pension overhaul has more than doubled the cost of completing payroll at Lynka, adding an extra zl. 5,000-zl. 10,000 per month, Westin said. He said the amount of paperwork, however, has grown tenfold. At accounting firm KPMG Polska, pension reform has caused the stack of paperwork involved in and time spent completing payroll to jump by 25%, said Malgorzata Sobota, financial controller at KPMG.
This is not what ZUS had intended. The agency planned for the pension changeover to actually generate a decrease in total paperwork, but difficulties arose when the necessary software for businesses to complete the ZUS forms failed to work. "Yes, we had problems," said Franciszek Zalewski, an employee at ZUS's press office. After distributing six different versions of the ZUS software, a final edition was completed during the first week of February.
Due to the delays, "companies were left with additional paperwork at the start of the reform," said Karen Kwiatkowska, a senior manager at accounting firm PricewaterhouseCoopers. She added that eventually this will be eliminated once working software is implemented.
With a functioning edition of the software, companies should be able to file information electronically with ZUS - either via the web or by sending a CD-Rom or disk to ZUS.
But to ease this process, companies must link their payroll program with the new ZUS software - a transaction that will run most businesses $5,000-$10,000, according to software producers. The total amount of business software opportunities as a result of the ZUS reform could amount to as much as $50 million for software producers, according to Ted Tully, vice president of consulting for Wonder Technology Group.
KPMG is using software producer Scala Polska to integrate its payroll system and the ZUS program. The company is dishing out about $5,000 on the reform, with $2,000 going for customizing the software, $1,000 to establish an interface and another $2,000 on overtime and consultant fees.
Wonder Technology Group is also working to create an interface that links company payroll systems with the ZUS software, Tully said. But the business is waiting for the final version of ZUS regulations before completing the software.
