SEPA salary payments have received significant attention, particularly in Ireland where the SEPA/Target holidays resulted in amongst other payment/direct debit delays, many late payroll payments. When it comes to payments there is nothing more important than payroll. Every company needs to ensure that their payroll process is happening efficiently, securely and on time. Getting your payroll wrong could result in unauthorised staff getting access to confidential salary information and / or payroll payments not getting out in time, potentially resulting in staff refusing to work. With SEPA salary payments it is important to be aware of the ‘SALA’ Category Purpose value in the SEPA XML payment format – this post will outline the key points.
Before we go any further I would urge you to check all of the below items with you bank, only then should you proceed with any changes to their SEPA salary payments process.
SEPA Salary Payments – SALA Category Purpose Code / Salary Reference:
- Will ensure that the submitted SEPA payroll payments are debited from the company’s account and credited to the employee’s on the same day – as long as the payroll payments are received before the cut off of course!
- Will always ensure that a Batch Booking – i.e. a single debit on your bank statement. Also, no detailed transaction information will be indicated in the bank statement / reporting information
- The confidentiality of the submitted SEPA payroll payments is ensured in the return bank statement (MT940 format or BAI2 format) description, where staff will only see SALA or a Salary related description
- Make sure you don’t submit the SEPA payroll payments on a SEPA Holiday – typically a TARGET closing day – but again check and confirm with your bank
SEPA Salary Payments – Stating The Salary Reference / SALA Code:
If you are submitting a salary payment via:
Online / Interactive channel:
Such as the banks internet banking portal – ensure you have the option to enter Salary Payments:
- Your system administrators may need to grant you access to the necessary SEPA Salary Payment type
- There may be a special option in the Payment Type, in which you need to indicate SEPA Salary Credit Transfer – or a related description
The SEPA XML Format:
Within the Payment Information section <PmtInf>
….In addition to the SEPA Payment Type identifier:
<PmtTpInf>
<SvcLvl>
<Cd>SEPA</Cd>
</SvcLvl>
….Ensure the following SALA value is indicated in Category Purpose Code:
<CtgyPurp>
<Cd>SALA</Cd>
</CtgyPurp>
I cannot stress enough, make sure your bank supports the above. Also, if your SEPA payroll process is handled by an external payroll provider check how they are handling and ensuring the confidentiality of your SEPA salary payments. I hope that helps! I’d love to hear your comments / experience with SEPA payroll processing….