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Setting Up Tax Compliance for Multi-Country Payroll¶

Overview¶

4Geeks Payroll includes pre-configured tax tables for 12 Latin American countries. Instead of manually calculating income tax brackets, social security rates, and employer contributions, you can set up compliant payroll calculations with one click — or customize rates for your specific needs.

In this tutorial, you will:

• Set up tax compliance with one-click configuration
• View and understand pre-loaded tax tables
• Customize tax rates for your organization
• Add custom deductions for unique requirements
• Configure multi-country payroll for global teams
• Export tax reports for filing and compliance

Supported Countries¶

4Geeks Payroll includes tax tables for these 12 countries:

Prerequisites¶

• 4Geeks Payroll account with Employee Stream enabled
• Employees added with their country of employment set correctly
• Payroll runs planned for each country where you have employees

Step 1: One-Click Tax Setup¶

The fastest way to configure tax compliance for a country:

1. Navigate to Payroll → Tax
2. Click Add Country
3. Select the country from the dropdown (e.g., “Costa Rica”)
4. Click Apply Default Configuration

The system automatically loads:

• Income Tax Brackets — Progressive tax rates specific to the country
• Employee Social Security — Percentage deducted from employee wages
• Employer Social Security — Percentage paid by the employer
• Health Insurance — Mandatory health contribution rates
• Pension Contributions — Retirement fund rates

• Statutory Provisions — Aguinaldo, vacation accrual, and other mandatory provisions

• The country now appears in your Tax tab with a “Default Configuration” label

• Repeat for each country where you have employees

Confirmation: What You Should See¶

After setup, the Tax tab shows:

Step 2: Understanding Pre-Loaded Tax Tables¶

Income Tax Brackets¶

Each country uses progressive income tax. Example — Costa Rica:

How it’s calculated: Each portion of income is taxed at its corresponding rate. An employee earning 3,000,000 CRC/month pays: - 0% on first 843,000 - 10% on 843,001–1,239,000 = 39,600 - 15% on 1,239,001–2,174,000 = 140,250 - 20% on 2,174,001–3,000,000 = 165,200 - Total Income Tax: 345,050 CRC

Social Security Rates¶

The system applies both employee and employer portions. Example — Costa Rica:

These percentages are applied to the employee’s gross pay.

Statutory Provisions¶

Mandatory employer contributions that accrue over time:

Aguinaldo (Christmas Bonus) — Costa Rica: - 1 month of salary paid in December - System accrues 1/12 of monthly salary each month - Displayed as a provision on payslips and in analytics

Vacation Provision — Costa Rica: - 15 days of vacation after 1 year - System accrues 1.25 days per month - Shown as liability in reports

Step 3: Customize Tax Rates¶

If your organization has specific rates different from the defaults, you can customize them.

Edit Default Tax Rates¶

1. Navigate to Payroll → Tax
2. Click on the country configuration you want to modify
3. Click Edit Configuration
4. Modify the rates:

Income Tax Brackets: - Add, edit, or remove brackets - Each bracket has: Minimum income, Maximum income, Rate (%) - Example: Change the top bracket from 25% to 30%

Social Security: - Modify employee contribution percentage - Modify employer contribution percentage

Health Insurance: - Modify employee rate - Modify employer rate

1. Click Save

Revert to Defaults¶

If you need to go back to the standard rates:

1. Open the country configuration
2. Click Revert to Default
3. Confirm — all custom rates are replaced with the latest defaults

Step 4: Add Custom Deductions¶

Add country-specific or company-specific deductions that aren’t in the standard tax tables.

1. Open the country tax configuration
2. Click Add Custom Deduction
3. Configure:

1. Click Save

The custom deduction now appears in payroll run calculations and on employee payslips.

Example: Adding a Custom Deduction¶

Scenario: Your company has a mandatory union contribution of 1.5% of gross pay.

1. Name: “Union Contribution”
2. Type: Percentage
3. Applies To: Employee
4. Calculation Base: Gross pay
5. Rate: 1.5%
6. Cap: (leave empty)
7. Save

Each pay period, 1.5% of the employee’s gross pay is deducted and shown on their payslip.

Step 5: Configure Multi-Country Payroll¶

When you have employees in multiple countries, each country’s tax rules apply independently.

Group Employees by Country¶

1. Go to Payroll → Employees
2. Verify that each employee’s country is set correctly in their profile
3. The country field determines which tax configuration is applied during payroll runs

Run Payroll for Multiple Countries¶

1. Create a payroll run (see Payroll Runs tutorial)
2. Do not filter by station — include all stations
3. The system automatically:
4. Identifies each employee’s country from their profile
5. Applies the correct tax configuration per country
6. Performs currency conversion for reporting (if needed)
7. Generates consolidated or per-country payslips

Currency Handling¶

• Each employee’s salary can be in a different currency
• The payroll run has a base currency for consolidated reporting
• Exchange rates are applied for employees paid in different currencies
• Payslips show amounts in both the payment currency and base currency

Step 6: Export Tax Reports¶

Payroll Tax Summary¶

1. Go to Payroll → Analytics
2. View the Tax Analysis section:

1. Use the Country filter to view tax data per country

Export Tax Report¶

1. In the Tax Analysis section, click Export Tax Report
2. Choose the period
3. Select format:
4. CSV — For further analysis in spreadsheets
5. PDF — For filing and compliance documentation
6. The file includes:
7. Per-employee tax breakdown
8. Totals by tax type
9. Employer contribution summary
10. Provisions accrued

Step 7: Stay Updated on Tax Law Changes¶

Tax rates change. 4Geeks helps you stay compliant:

Automatic Monitoring¶

• 4Geeks monitors tax law changes in all 12 supported countries
• When rates change, default configurations are updated
• Notifications are sent via email and in-console alerts

Reviewing Updates¶

1. Go to Payroll → Tax
2. Countries with pending updates show an Update Available badge
3. Click the country, then click Review Changes
4. See what changed: “Top income tax bracket increased from 25% to 30%”
5. Choose to:
6. Apply Update — If you’re using default configuration (automatically applied)
7. Review & Compare — If you have custom configuration, compare current vs. new

Recommended Review Cadence¶

• Quarterly — Check for tax law updates
• Annually (January) — Review all configurations at the start of the fiscal year
• After major legislation — Check for changes when new tax laws are announced

Best Practices¶

Configuration Management¶

• Start with defaults — They’re maintained by 4Geeks and updated when laws change
• Document customizations — If you customize rates, note the reason and effective date
• Review custom rates regularly — Custom configs don’t auto-update; check them quarterly
• Test with draft runs — Run a draft payroll after changing tax config to verify calculations

Multi-Country Operations¶

• Verify employee countries — Ensure each employee’s country is correctly set
• Understand local provisions — Aguinaldo, 13^th salary, and other provisions vary by country
• Export per-country reports — File taxes separately in each jurisdiction
• Keep local advisors informed — Share tax reports with your local accountants or payroll providers

Compliance¶

• Don’t override without reason — Only customize rates when you have a specific business need
• Reconcile regularly — Compare 4Geeks tax calculations with your local provider’s filings
• Archive tax reports — Export and store tax reports for statutory retention periods
• Audit trail — All configuration changes are logged in the system

What’s Next?¶

• Learn how to Execute Payroll Runs & Generate Payslips
• Learn how to Use Analytics to Monitor Payroll Costs
• Review the Tax Compliance reference documentation

Need Help?¶

• Documentation: docs.4geeks.io/en/payroll
• Support: Available through the console dashboard
• Get Started: console.4geeks.io/payroll

Still questions? Ask on Discord or explore tutorials