Your guide to digital pay slips: fast, convenient, compliant

More and more companies are taking the leap and transitioning away from issuing payroll documents, such as salary statements, time sheets and income tax statements, to employees in hard copy. These sorts of paper-based document processes are prone to inefficiencies, especially issues like unstructured files and time-consuming workflows. Digitalizing your pay slips replaces this inefficient, paper-based approach with standardized, transparent and faster processes.

The advantages of digital pay slips:

Digital pay slips save resources

Digitalizing your pay slips greatly reduces the amount of admin involved. No more printing out salary statements, stuffing envelopes and lugging them to the mailbox—just one click sends the document directly to the employee’s online inbox. And it doesn't stop there: digital pay slips also save costs by eliminating the need to pay for postage, paper and envelopes.

Digital pay slips make processes faster and secure

The delivery channels for digital payroll documents are typically shorter than for hard copies. HR and employees access an online portal where they can share documents in real time, which cuts out some tasks altogether and automates others. For instance, employees no longer need to actively check the mailbox because the system alerts them to the presence of new documents in their online inbox.

HR benefits from the elimination of printouts and the need to inform employees about the arrival of new salary documents. Delivery is fully automated. The result is high-quality, standardized processes that are far less error-prone than their paper-based counterparts.

Digital salary statements centralize document access

Employees access their digital payroll documents centrally. These are usually stored in a system with both inbox and archive functions, enabling employees not only to view their latest payroll documents, but also to access their document history from past months or years. By distributing documents to employees via a centralized platform, companies ensure transparency as well as availability at any time and from anywhere.

Companies can save a lot of time and effort by providing salary statements to employees digitally. For example, in Germany, the Trade Regulation Act requires employers to give employees certain documents, like salary statements, in "text form." According to the German Civil Code, "text form" means the content must be readable and stored on something durable. A "durable medium" is one that lets employees keep the document in a way that's easy to access for as long as needed and ensures the content stays unchanged.

However, it’s not enoigh to simply create the statement of earnings and then make it available to the employee—it is also the employer’s responsibility to issue it.

What does that mean? An employer has only fulfilled its payroll duties once the statement legally reaches the employee, i.e. when it is within the recipient’s control. A personalized digital inbox for each employee is one way of complying with this requirement.

Digital salary statements require employee consent

It’s important to note here that the employer cannot decide unilaterally to switch over to issuing digital pay slips. Employees must give their consent, either express or implied, to receiving digital salary statements.

Ideally, the employee will provide written consent as proof in the event of any legal issues later on.

Are employees entitled to paper salary statements?

Employees don’t have a general right to receive salary statements on paper. As long as companies meet the "text form" requirement, they can choose to provide salary statements digitally or on paper. However, if a company decides to switch from paper to digital pay slips, employees must agree to the change.

It’s worth noting that some works agreements or collective agreements may require salary statements to be issued on paper. In such cases, the paper version takes priority, and the digital version is optional.

Software solutions such as Doxis Human Resources digitally deliver payroll documents directly into the employee’s control. It’s less work for HR and more convenient for the employee.

Step 1: Digital payroll documents in DMS

In the Doxis document management system (DMS), you digitally manage payroll documents over their entire life cycle—create, edit, validate, approve, send and archive—while automated processes speed up entire payroll tasks.

For instance, Doxis integrates seamlessly into leading third-party systems such as SAP SuccessFactors. Doxis automatically detects when an employee’s master data is changed in SAP and updates the details in the employee’s eFile to ensure master data is managed from end to end. So whenever you create the next digital pay slip in Doxis, it will already contain the employee’s new contact details.

Doxis additionally lets you manage entire workflows automatically. For example, Doxis hands off payroll documents to the next colleague for validation. Deputy rules keep workflows running quickly and smoothly at all times.

Step 2: Electronic PDF stamps record the delivery time

Pay slips must be issued to employees in text form at the latest when HR triggers the salary payment. An electronic PDF stamp provides proof that the company complies with this requirement. The stamp is a digital mark that adds extra information to the document.

Let’s say you have validated the pay slip and are now making it available via the Doxis employee self-service portal. You can add a PDF stamp to the digital pay slip with the time of delivery. Dynamic stamps in Doxis even record this data for you automatically. In other words, the PDF stamp automatically captures data such as the current time or date.

Step 3: Delivery via employee self-services

In Doxis Human Resources, you make approved salary statements available to employees via the employee self-service portal. HR uploads the document to the eFile, which ensures that the payroll document is actually delivered into the employee’s control.

The employee can independently access this self-service eFile using the employee self-service function. Companies must provide the necessary technical infrastructure to make this possible. Only HR and the employee personally can access the digital file—ensuring data protection and data security considerations are covered at all times.

Step 4: Compliant archiving

For employees, the payroll process ends with the receipt of their pay slip. Companies, on the other hand, are required to compliantly store payroll documents for the mandatory retention period of six years. In Doxis, you archive digital payroll documents in line with audit requirements and accessible at all times.

Digital payroll documents provide employees with transparent, traceable information about their wage or salary payments. Details include the period covered by the payment, an itemized breakdown of earnings and deductions, and net earnings.

Data protection is particularly important here, since payroll documents issued digitally must be delivered into the control of the employees—but at the same time remain inaccessible to unauthorized persons. The solution: personalized employee inboxes in combination with an employee self-service portal. Doxis provides the infrastructure for you, so you can digitalize and standardize payroll processes from end to end and save resources.

Ready to see how Doxis can save your own company more time and resources? Get in touch! Our experts will be happy to provide a free no-obligation consultation.

FAQs on digital pay slips