Monthly Payroll Cycle and Digital Work Card: Control and Reconciliation Checklist

Payroll processing in a Greek business is no longer a simple, repetitive process of calculating net earnings and issuing payments. The universal application of the Digital Work Card, the operation of the ERGANI system, and the requirement for absolute cross-referencing of actual employment data with social security and tax records (APD, FMY) have transformed payroll into a critical hub of regulatory compliance and business risk.

Even marginal discrepancies between card 'punches,' declared digital work schedules, and the final payroll statement can lead to significant administrative fines, retroactive social security burdens, and labor disputes. To ensure accuracy and legality, a rigorous, repeatable monthly payroll cycle based on standardized operating procedures (SOPs) is required.

_This checklist structures the monthly review into four distinct phases: change preparation, working time reconciliation, earnings settlement, and post-payroll reconciliation._

Phase 1: Pre-Payroll Change Control (Pre-Payroll Checklist)

This first phase occurs before the main calculation and focuses on gathering and verifying all contractual and organizational personnel changes that took place within the reference month.

1.1 Employee Register and Contractual Changes

• [ ] Recruitment / Departure Check: Cross-reference hiring announcements (E3) and contract termination/cancellation forms (E5/E6) with start and end dates in the payroll software.
• [ ] Terms of Employment Modifications: Record and confirm any changes in contractual salaries, job positions, cost centers, or contractual weekly working hours (full-time/part-time).
• [ ] Fixed-Term Contracts: Check expiration dates and timely record renewals or conversions to indefinite-term contracts.
• [ ] Personal Details and Rights: Update personal information (e.g., dependents for tax relief or allowances), changes in bank accounts (IBAN), and social security categories (e.g., old/new insured, special funds).

1.2 Management of Leaves, Absences, and Sick Leaves

• [ ] Regular Leave: Reconcile leave requests with digital leave registers and record days in the system.
• [ ] Sick Leave: Collect medical certificates, e-EFKA sick pay subsidy certificates, and correctly calculate employer burden days (first 3 days versus subsidized period).
• [ ] Special Leave: Record maternity, parental, educational, or unpaid leaves with corresponding documentation and suspension of social security contributions where applicable.

Phase 2: Timekeeping, Digital Work Card, and ERGANI Reconciliation

Managing working time is the most sensitive control point. Cross-referencing physical card punch data with declarations in the ERGANI system must be completed before finalizing earnings.

```

[Timekeeping System / Digital Work Card]

│

▼

[Discrepancy & Exception Detection] ──► (Missing punches, delays, early arrivals)

│

▼

[Reconciliation with Declared ERGANI Schedules] ──► (Compatibility with digital program/modifications)

│

▼

[Categorization of Hours for Settlement] ──► (Regular, Overtime Work, Overtime, Night, Sundays)

```

2.1 Punch Event Control (Card Punches)

• [ ] Missing Punches: Identify cases of entry without a corresponding exit (or vice versa) and immediately justify/correct based on established procedures.
• [ ] Arrival/Departure Discrepancies: Check punches outside the declared digital work schedule. Differentiate between preparatory time tolerance and actual work performance.
• [ ] Flexible Arrival: Verify adherence to the declared flexible arrival range where applicable.

2.2 Overtime and Premium Cross-Referencing

• [ ] Overtime Pre-announcement Check: Cross-reference recorded overtime hours in timekeeping with overtime pre-announcement forms/declarations in ERGANI. No overtime should be settled without prior legal recording.
• [ ] Distinction Between Overtime Work and Legal Overtime: Correct allocation of additional hours (e.g., 41st to 45th hour in a 5-day week as overtime work, 46th and above as overtime).
• [ ] Special Time Premiums: Automated check for night work hours (22:00 – 06:00), Sunday and public holiday work, and cross-referencing whether compensatory rest (day off) is provided.

Phase 3: Earnings Settlement and Calculations (Payroll Calculation Checklist)

During the calculation phase, raw data is converted into financial figures. Control here focuses on the correctness of coefficients and calculation rules.

3.1 Gross Earnings and Special Items

• [ ] Basic Salary / Daily Wage: Check that no salary falls below the legal minimum wage or applicable collective/company agreements (CBAs), considering any recognized seniority increments.
• [ ] Regular and Extraordinary Benefits: Correct distinction of regular earnings from extraordinary bonuses, productivity premiums, or voluntary benefits regarding their social security base.
• [ ] Fringe Benefits: Evaluate and record company cars, meal vouchers, loans, or housing, to be included in the taxable and/or social security base according to Tax Code limits.

3.2 Social Security Contributions and Taxation

• [ ] Social Security Earnings Cap: Apply the maximum social security earnings limit (e-EFKA cap) for high-earning employees.
• [ ] Withholding Tax on Employee Salaries (FMY): Check tax brackets, correct application of tax deductions based on dependents, and inclusion of special contributions where required.
• [ ] Garnishments and Third-Party Deductions: Apply prescribed garnishments (AADE, funds, alimony) with strict adherence to the non-attachable limit of net earnings.

Phase 4: APD, FMY Reconciliation and Accounting Integration (Post-Payroll Checklist)

After calculations are completed, the process requires triple reconciliation: between Payroll, Social Security/Tax Declarations, and General Ledger.

```

┌────────────────────────────────────────────────────────┐

│ Payroll Software │

│ (Total Cost, Gross, Contributions, Taxes) │

└──────────────┬─────────────────────────┬───────────────┘

│ │

▼ ▼

┌──────────────────────────┐ ┌────────────────────────┐

│ Social Security / Taxes│ │ General Ledger │

│ • APD e-EFKA │ │ • Accounts 60.xx │

│ • Provisional FMY │ │ • Liabilities 54/55 │

│ • myDATA (Payroll) │ │ • Payments 38.xx │

└──────────────────────────┘ └────────────────────────┘

```

4.1 APD Reconciliation (Detailed Periodic Declaration)

• [ ] Specialty Codes & KAD (Activity Codes): Check alignment of employer KAD with Specialty Code and Coverage Package (KPK) for each employee.
• [ ] Total Comparison: The sum of social security earnings and contributions (employee + employer) from payroll must perfectly match the total of the provisional APD printout.
• [ ] Contribution Subsidies / DYPA Programs: Check application of contribution reductions from employment programs and correct depiction of corresponding fields.

4.2 FMY and myDATA Reconciliation

• [ ] FMY Declaration: Reconcile withheld tax and special contributions with the monthly declaration of withheld tax payments to AADE.
• [ ] myDATA Transmission: Prepare and submit the payroll accounting entry (Document Type 17.1 - Payroll) with analysis into gross earnings, employer contributions, and other personnel expenses.

4.3 Accounting Entry and Payments

• [ ] General Ledger Balance Check: Verify that the payroll entry is fully balanced (Debit of Group 60 expense accounts = Credit of Group 54 liabilities for taxes, Group 55 for social security funds, and Group 53 for payable earnings).
• [ ] Bank Order File (SEPA XML): Check the final bulk payment file to the bank. The total of the order must equal the net payable amount on the payroll sheet.

Practical Example: Identifying and Correcting Timekeeping Discrepancies

Let's consider a typical case of a full-time employee (40 hours/week, monthly gross salary €1,200), with an hourly wage of €7.20 (calculated as 1,200 / 25 / 6.667 or based on contractual rates):

Discrepancy Scenario

During the monthly timekeeping review, the following data are found for a specific week:

• Declared Schedule in ERGANI: Monday to Friday, 09:00 – 17:00 (40 hours).
• Actual Digital Card Punches:

* Monday - Thursday: 09:00 – 17:00 (32 hours).

* Friday: 09:00 – 20:00 (11 hours of continuous work).

• Total Working Time: 43 hours.

Control and Settlement Procedure

```

Total Time: 43 hours (Contractual: 40 hours)

├─ 40 hours: Regular Earnings (Basic Salary)

├─ 1 hour (41st): Overtime Work (Friday 17:00 - 18:00) ──► Premium +20%

└─ 2 hours (42nd-43rd): Overtime (Friday 18:00 - 20:00) ──► Premium +40%

```

1. Pre-announcement Check: The payroll specialist checks if a declaration for the 2 hours of overtime (18:00 – 20:00) was submitted to ERGANI in a timely manner before the start of the overtime work.

If submitted:* This constitutes legal overtime with a 40% premium on the paid hourly wage.

If not submitted:* This constitutes illegal overtime, which incurs compensation equal to the hourly wage plus a 120% premium, beyond the administrative risk.

1. Financial Calculation (Assuming legal overtime):

* Overtime Work: $1 \text{ hour} \times 7{,}20\,\text{€} \times 1{,}20 = 8{,}64\,\text{€}$

* Legal Overtime: $2 \text{ hours} \times 7{,}20\,\text{€} \times 1{,}40 = 20{,}16\,\text{€}$

* Total additional remuneration: $28{,}80\,\text{€}$

1. Social Security and Tax Regularization:

* The amount of €28.80 is added to the month's social security earnings, the corresponding e-EFKA contributions are calculated, and it is incorporated into the FMY calculation.

Without automated card-ERGANI cross-referencing, this discrepancy would either remain unpaid (creating a labor violation) or be paid without the required legal documentation.

The 5 Most Common Business Payroll Errors

1. Settlement of Overtime Without Prior Declaration in ERGANI: Payment of additional hours appearing on the work card without timely digital pre-announcement. This leaves the business exposed to fines for inaccurate declarations.
2. Incorrect Handling of Short-Term Sick Leave: Failure to distinguish the first 3 days of sick leave (where 50% of the daily wage is paid by the employer without e-EFKA involvement) from subsequent subsidized days, leading to errors in calculating social security days.
3. Ignoring the Contribution Cap in Parallel Employment: Failure to check total earnings in cases of employees with multiple employers or special contracts, leading to incorrect withholding of contributions beyond the maximum limit.
4. Discrepancy Between Payroll Cost and myDATA: Transmission of payroll entries to myDATA with discrepancies compared to the final APD and trial balance, causing tax inconsistencies during the annual closing.
5. Manual Intervention in Timekeeping Data: Modification of time recording files in Excel spreadsheets instead of documented correction through the official time tracking system, rendering data unverifiable in case of an on-site inspection.

Monthly Cycle Timeline Summary Table

| Phase | Time Window | Key Deliverables | Approval Responsibility |

| :--- | :--- | :--- | :--- |

| 1. Change Collection | 20th - 24th of each month | Leave records, sick leave, hirings, departures | HR / Department Heads |

| 2. Timekeeping Reconciliation | 25th - 27th of each month | Cleared record of hours, overtime & night work | Payroll Specialist / Operations |

| 3. Payroll Calculation | 27th - 28th of each month | Payroll statements, pay slips, SEPA | Financial Director / Payroll |

| 4. Reconciliation & Declarations | End of month until deadlines | APD, FMY Declaration, myDATA (17.1), Accounting Entry | Accounting / Tax Advisor |