How to Set Up a Payroll Project for Your Company

As a business grows, manually processing salary payments becomes a serious challenge. Many companies find themselves in a situation where an accountant spends hours every month manually creating dozens of separate payment instructions twice a month using each employee’s IBAN details and sending payments through online banking. One wrong digit — and a lengthy process of recovering the funds begins.

If this routine sounds familiar, it may be time to optimise the process. That is exactly what a payroll project is designed for — a solution that turns hours of accounting headaches into just a few clicks. In this article, we’ll look at how the system works, why it benefits both employers and employees, and how to set it up quickly and without unnecessary bureaucracy.

Let’s start with the basics. Simply put, a payroll project is a comprehensive financial solution that allows a company to automate mass salary payments to employees. Instead of creating a separate payment instruction for each person, you create a single consolidated payment register, and the bank distributes the funds to the relevant accounts.

How does this work in practice? The process consists of several simple steps:

1. Your accountant calculates salaries as usual in the company’s accounting software.
2. Based on these calculations, a single payment register is created, containing the account numbers and amounts to be credited.
3. Your company separately pays taxes and mandatory contributions (personal income tax, military levy and unified social contribution) to the state budget, while the net salary amount is transferred to the bank in accordance with the payment register.
4. The bank receives the payment and the register, then automatically credits the funds to the employees’ accounts. Once the register has been processed, the funds are usually credited during the banking day or according to the bank’s terms.

This solution minimises human error. You no longer have to worry about entering the wrong account number for a particular employee, as account details and employee information are verified when the accounts are opened and then used in subsequent payment registers.

Many business owners believe that payroll projects are only suitable for large corporations or factories. That’s a myth. Even if you have a small team, automating salary payments can save a huge amount of time.

Why is it beneficial for you as a business owner or manager?

• Significant time savings. Instead of dozens of separate payment documents, your accountant creates just one. The payment process can be reduced from several hours to 10–15 minutes.
• Reduced banking fees. Individual payments to cards issued by different banks using IBAN details often involve higher fees. The financial institution you choose as your payroll bank will usually offer a single, more favourable fee for crediting the entire payment register. The exact fee depends on the bank’s tariffs and service terms.
• Confidentiality. Employees cannot see each other’s salaries, as could happen when using paper payroll sheets or shared payment registers.
• Simplified tax reporting. Since salary payments are made through a single corporate account, it is much easier for the accountant to monitor the payment of taxes and mandatory contributions when paying both advances and the main part of the salary.

What does your employee get?

• A free payroll card. As part of payroll packages, banks often offer free card issuance and maintenance, as well as special terms for certain transactions.
• Preferential financial services. Banks often offer participants in payroll projects reduced interest rates on loans, more favourable deposit terms or a free overdraft (a quick-access limit available before payday).
• Additional features. Modern cards support Apple Pay and Google Pay, offer cashback and come with convenient mobile banking apps.

Let’s move on to the practical part. If you decide to set up a payroll project, the entire process does not take much time. Here is a step-by-step guide to help you get started without unnecessary effort.

Pay attention to the cost of crediting funds, the convenience of the online banking system, integration options with accounting software, and the terms offered to employees (fees, cash withdrawal, limits, etc.).

The list of required documents depends on the bank and whether your company is already a customer. Usually, you will need the company’s incorporation documents and documents confirming the director’s authority. If you already have a corporate account with the bank, the process becomes much simpler — most procedures can be completed online.

The agreement sets out the payroll project service fees, the timing of payments and the responsibilities of both parties.

You provide the bank with an employee register so that accounts can be opened and cards issued. This is done through a secure communication channel within the online banking system.

Once the agreement with the bank has been signed, the next stage is working directly with your employees. It is important to coordinate the process properly to avoid delays with the next salary payment.

The bank opens an individual employee card account for each employee. Plastic or virtual cards are then issued based on these accounts. The process works as follows:

1. Providing identification details. Employees provide the required identification information and complete the account-opening procedure in accordance with the bank’s requirements. Modern financial institutions allow this to be done quickly and conveniently using digital tools or electronic forms.
2. Providing the information to the bank. The information is uploaded to the bank’s system. An individual payroll account is opened for each employee.
3. Issuing and receiving cards. Depending on the arrangements, the bank may deliver the cards directly to your office, or employees may collect them from the nearest branch themselves. Fully digital solutions are also becoming increasingly popular, allowing a virtual card to be activated through the mobile app within minutes using document sharing via Diia.

An important point: under the current legislation of Ukraine, an employer may not restrict an employee’s choice of bank for receiving their salary. An employee may have their salary paid into an account at any bank of their choice. If a new employee wants to receive their salary on an existing card issued by another bank, you must provide them with this option. However, for convenience, most employees are happy to join their company’s payroll project if the terms are genuinely favourable.

If an employee already has an active card issued by the same bank, they can contact a bank manager and ask to link the existing card to the company’s payroll project instead of issuing a new physical card.

Once the system is up and running, the daily routine becomes fairly simple. However, there are several important technical and financial aspects I want to highlight.

First, pay attention to the format of payment registers. Most banks support importing registers in formats compatible with popular accounting software. These registers can usually be easily generated and exported directly from the accounting system. Before making your first payment, be sure to run a “test transaction” with a small amount to make sure the integration works correctly.

Second, when planning your budget, take into account the regular costs of maintaining the payroll project. These may include a fee for crediting funds or other charges according to the bank’s tariffs. Some financial institutions offer a fixed monthly service fee or even a free tariff if the company maintains a certain balance in its accounts or uses other banking services.

Third, don’t forget about timing. To ensure salaries are paid on time, the payment register and funds must be submitted before the bank’s operating hours end. Each bank sets its own cut-off time. If you send the funds later, the payment may be processed on the next business day.

Yes, this is possible and is not prohibited by law. You can choose to pay salaries without setting up a payroll project. In this case, payments are made by creating separate payment instructions using the IBAN details of each employee.

But let’s be honest: this approach has many limitations, especially as your company grows:

• Time-consuming. If you have more than 10–15 employees, manually entering payment details can become a nightmare for your accountant.
• Risk of errors. One incorrect letter in a name or one wrong digit in a long IBAN code can cause a payment to be delayed or returned.
• Financial losses. Payments to accounts outside your bank using individual instructions often cost more than bulk employee payments. A fee charged for every individual payment can quickly outweigh any perceived savings on a monthly service fee.
• More difficult tax payment control. You will have to manually calculate and submit the relevant tax amounts for each payment, whereas this process is automated within an integrated payroll project.

That is why this option is generally suitable only for microbusinesses with 2–3 employees, where transaction volumes are minimal.

In my view, even for teams of just a few people, this tool can already be worthwhile, especially if salaries are paid regularly. It is a practical way to free up time for more important business tasks than mechanically copying payment instructions.

By introducing a payroll service for your company, you are taking a step towards greater transparency, efficiency and employee loyalty. People appreciate receiving their salaries on time, without delays or technical issues, while having a card that provides free access to modern banking services.

Translation into English was created with the help of artificial intelligence.