How to switch payroll provider without missing a month of pay

Changing your payroll provider — or your payroll package — is one of those decisions put off for years, not because the current one is good, but because the risk looks large. The fear is legitimate: payroll has fixed deadlines, and a badly executed migration shows up immediately, in people’s bank accounts.

The good news is that the risk can be reduced almost entirely by the order of operations. This guide describes that order.

If your question is more “in-house or outsourced”, start with the guide to outsourcing payroll. Here we assume the decision has been made and we discuss the migration.

Choose the moment: the start of a fiscal year

The best moment to migrate is 1 January, and the second best is the start of a quarter.

The reason is simple: many elements are calculated cumulatively over the year — income earned, leave taken, deductions applied. A mid-year migration forces you to transfer correctly not only the current position, but the whole cumulative history as well. It is feasible, but it multiplies the points at which something can be transcribed wrongly.

If you do migrate mid-year, treat the transfer of the history as a separate task, with its own verification — not as a detail of the import.

What data you have to ask for (and receive in a usable format)

This is the part where negotiation matters most. Ask explicitly, in writing, before you terminate the current contract:

• the personnel data — contracts, acte adiționale (addenda to the employment contract), job classifications, permanent bonuses;
• the payroll history for the current year, month by month, for each employee;
• the leave balances as at the date, for each employee;
• the returns filed (including the D112) and the corresponding filing receipts;
• the history of withholdings — garnishments, instalments, maintenance payments, with the documents that justify them.

Ask for open formats (CSV, Excel), not PDFs or screenshots. A PDF export of a payroll run is evidence, not a source of data for an import.

Watch out for one contractual trap: check in good time whether your current contract sets a deadline after which the provider is no longer obliged to make the data available to you. It is easier to obtain the exports while the relationship is still active.

Run one month in parallel

This is the one step not worth skipping. For one month, calculate the salaries in both systems and compare the results, employee by employee, not in total.

The total can be identical while two errors cancel each other out. The comparison has to be made line by line: gross, each withholding, net.

Small differences — of the order of a few bani — usually come from rounding and are acceptable if you understand them. Differences that cannot be explained have to be cleared up before the migration, not after.

The atypical cases are worth checking first, because that is where the real differences appear:

• employees with the personal deduction applied (including the supplement for those under 26 and the one for children in education);
• employees on sick leave during the test month;
• employees with withholdings or exemptions (for example the income tax exemption for severe or pronounced disability);
• part-time work and contracts started or ended in the middle of the month;
• people whose base salary is exactly at the level of the minimum wage, where the tax-exempt amount applies.

You can quickly check the order of magnitude for an individual case with the net salary calculator, before opening a discussion with the provider.

What remains your duty, whoever the provider is

Outsourcing moves the work, not the liability. In dealings with the authorities, the employer remains the party under the obligation. In concrete terms:

• the D112 return is filed monthly or quarterly, depending on the category of employer, with a deadline of the 25th of the month following the reporting period — check which cadence applies to you before you plan the migration;
• REGES has to be updated within its own deadlines, on hiring, amendment or termination — see what has changed in REGES;
• the record of working time remains mandatory and has to be available for an ITM inspection.

If the provider misses a deadline, the penalty falls on the company. It is therefore worth setting out contractually who bears any penalties — but bear in mind that a clause between private parties does not change who is liable towards the state.

The check after the first month “on your own”

After the first month run exclusively on the new system, check three things, in this order:

1. The returns were filed and accepted — the filing receipts, not verbal confirmation.
2. The payments arrived, in the correct amounts, for all employees — including those with withholdings.
3. The leave balances were taken over correctly — this is the most frequent import error, because it does not show up in the current month, only when someone asks for leave.

How Workly helps

Migration is simpler if the new system lets you import data in common formats and run in parallel with no extra cost during the test period. Workly covers time tracking, leave and payroll in the same place, with an export to SAGA for accounting — which reduces the number of manual transfers between systems, that is, exactly the places where errors appear. For the transition period, support in Romanian helps in clarifying the differences from the parallel comparison.

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Informational article, accurate at the date of publication. Not tax, legal or accounting advice. Filing deadlines and reporting obligations may change — always check the deadlines in force at the official source (ANAF, ITM, the Official Gazette) or with your accountant, before planning a migration.