Puerto Rico Payroll Services

At Bradford Jacobs, we navigate the administration of the Puerto Rican payroll system for you. We do the work, so you do not have to.

Puerto Rican Payroll

Operating payroll in the Commonwealth of Puerto Rico is a major commitment in the expansion plans of international companies. Puerto Rico also poses unusual questions for incoming companies due to its status with the United States of America. The Caribbean island is an unincorporated territory of the US and complications arise in operating payroll in the areas of tax and social insurance regulations.

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Economically, Puerto Rico has a dominant manufacturing sector with roughly half of its contribution to Gross Domestic Product from the high-tech area of pharmaceuticals, medical devices and laboratory equipment. The US is Puerto Rico’s main trading partner, although the government’s Incentives Code aims to attract wider streams of Foreign Direct Investment into other areas of manufacturing, tourism, exports support, infrastructure and international banking and insurance.

This potential nevertheless requires expert knowledge to negotiate Puerto Rico’s extra layers of bureaucracy that jeopardise implementing your business plan swiftly and successfully… this is why you need Bradford Jacobs alongside. We have total understanding of all the issues surrounding Puerto Rico’s payroll regulations, contracts, taxes, labour laws and every aspect of employment compliance.

Bradford Jacobs’ Professional Employer Organisation (PEO) and Employer of Record (EOR) platforms and networks provide complete answers to every question your company will encounter before you move into the economy, especially when it comes to operating payroll.

  • Remote payroll – This option allows businesses to operate under a single payroll system, by adding employees in Puerto Rico to your parent company’s payroll. However, these employees must operate under different regulations, which is likely to cause problems.
  • Internal payroll – You may operate payroll for your subsidiary, especially if you are committed to growing your company’s presence in Puerto Rico. However, this does require hiring dedicated HR staff who understand Puerto Rican employment and compliance laws.
  • Puerto Ricos’ payroll processing company – If you are considering outsourcing, then working with a Puerto Rican payroll company will help in processing your payroll – but not when it comes to compliance.
  • Puerto Ricos’ payroll outsourcing – However, there is another option available that solves both concerns – by working with Bradford Jacobs. We can handle payroll and compliance for all your employees in Puerto Rico. We take the administrative stress off your shoulders so you can focus on what you do best.

Foreign companies intending to operate in Puerto Rico have the option of setting up a subsidiary in the country in order to run payroll for their employees. Foreign-owned subsidiaries in Puerto Rico are typically set up as a limited liability company (LLC) or a corporation, both of which generally protect shareholders, directors and officers from liabilities. LLCs are becoming the preferred option. They operate under the General Corporations Law and the Internal Revenue Code of 2011. Once the subsidiary is established, procedures for onboarding employees onto the company payroll in Puerto Rico include:

  • Obtain or verify the individual’s nine-digit Social Security Number (SSN), Número de Seguro Social, which identifies the person for tax purposes. Begins with 580 for Puerto Rico
  • The SSN must be registered with the Puerto Rico Treasury within 30 days of starting employment
  • Employees must complete Forms 482 for making tax returns to both federal and Puerto Rico authorities, where applicable
  • Employees complete Form 499R-4 for calculating withholding taxes for state revenue authorities
  • Employers must complete and retain Form 499R-4 for each member of staff as authorisation for withholding taxes from payroll
  • Other forms for operating payroll are Form 499R-1 for monthly deposit of withheld taxes; Form 499R-1B for quarterly return of withheld taxes; Form 499R-2/W-2PR the withholding statement; Form 499R-3, the annual reconciliation of payroll taxes
  • Employees must be registered by their employer with the Puerto Rico State Insurance Fund for compensation for work-related accidents

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