Data Processing Agreement

What is a Data Processing Agreement (DPA)?

A Data Processing Agreement (DPA) is a legally binding contract between a data controller and a data processor that outlines how personal data will be handled, stored, protected, and processed in compliance with data protection regulations—most notably the General Data Protection Regulation (GDPR) in the EU. 

In a global payroll or HR context, DPAs are foundational to ensuring that data about employees, contractors, and candidates is processed lawfully and securely by third-party vendors. 

Why It Matters to Global Employers 

With payroll, benefits administration, and HR tech increasingly outsourced, DPAs act as the backbone of legal accountability between your organization and any third-party data handler—such as a global payroll provider, time tracking software, or benefits aggregator. 

Without a robust DPA in place, businesses risk: 

• Breaches of local or international data privacy laws 

• Unclear accountability in case of data incidents 

• Fines, penalties, and reputational damage 

 Core Elements of a Strong DPA 

A well-drafted DPA typically includes: 

The TopSource Worldwide Approach 

At TopSource Worldwide, we ensure every client engagement involving data is governed by a rigorous, GDPR-aligned Data Processing Agreement.

Our DPA covers: 

• Secure global payroll and HRIS data handling 

• Transparent sub-processing protocols 

• Employee data transfers across borders 

• Compliance with local laws (e.g., GDPR, UK DPA 2018, CCPA) 

• Incident reporting SLAs and real-time audit support 

Our Portico HR platform is ISO 27001-certified, further reinforcing our commitment to end-to-end data protection. 

When Is a DPA Required? 

Any time a third party handles personally identifiable information (PII) on your behalf—including salary data, tax IDs, addresses, or contract terms—a DPA should be in place. 

Common scenarios include: 

• Outsourced payroll providers 

• Background check vendors 

• Recruitment platforms and ATSs 

• Cloud-based HR or benefits software 

Frequently Asked Questions 

Q: Is a DPA mandatory under GDPR? 

 Yes. Article 28 of GDPR makes it mandatory for data controllers to have a DPA in place with any processor handling EU data. 

Q: Can a processor modify or use data without permission? 

 No. A DPA prohibits processors from using the data for any purpose other than what’s contractually agreed. 

Q: What happens if my processor has a breach? 

 The DPA will dictate the timelines and notification process. Under GDPR, data breaches must typically be reported within 72 hours. 

Q: What’s the difference between a data controller and a data processor? 

 The controller decides the purpose and means of data use; the processor acts on the controller’s instructions. 

Looking Ahead 

In an era where data equals trust, having airtight agreements is non-negotiable. A DPA isn’t just a legal formality—it’s a strategic safeguard that ensures your workforce data remains protected, auditable, and globally compliant. 

Need Help Navigating Global Data Compliance? 

Let our in-country experts ensure your data processing workflows—whether payroll, HR, or onboarding—are secure, compliant, and future-ready. 

→ Speak to TopSource Worldwide’s Compliance Team 

Practical Example of a DPA:

A European e-commerce business uses a third-party service for customer email marketing. They sign a DPA with the service provider, ensuring that customer data is processed and stored in accordance with GDPR requirements.