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The Wage Protection System: running payroll without breaches
Most payroll breaches are not a refusal to pay. They are a file whose figures do not match the registered contract. The money left the account; the system did not recognise it.
The Wage Protection System ties salary payment to a verifiable banking channel, evidencing that an employee received the agreed wage on time. It is a monthly operating obligation, not a formation step completed once.
How it works in practice
The business prepares an electronic salary file carrying each employee's details and wage, submits it through an approved financial agent, and the amounts are paid to employees' accounts. The basis of review is matching: what is in the file must agree with the contract registered with the competent authority.
Where it goes wrong
- A wage in the file that differs from the registered contract — the most common rejection
- Employee details not updated after a residency renewal or contract amendment
- A leaver still in the file, or a joiner not yet added
- Basic wage and allowances split differently from the contract
- Late submission falling outside the window even where the money actually moved
Why this connects directly to your books
The salary file is not a document separate from accounting. It reflects the payroll register, which is itself posted to the ledger along with end-of-service accruals, allowances and deductions. A business preparing the file from a side spreadsheet rather than from its accounting system creates two sources of truth — and meets the difference at the annual audit.
End-of-service: a liability that accrues quietly
The end-of-service entitlement grows with every month of service whether or not it is recorded. Businesses that do not accrue it monthly report a higher profit than is real all year, then meet the full figure at the first wave of departures. It affects your financial statements and therefore your corporate tax base.
What keeps the file clean
- Reconcile wages to registered contracts before each submission, not after
- Make your accounting system the file's only source
- Update joiners and leavers in the month they occur
- Submit early rather than on the last day — a rejection needs time to fix
- Accrue end-of-service monthly, not annually
