The meaning of Global Payroll

‘Payroll’ refers to the process of a company paying its employees. So, it stands to reason that ‘global payroll’ is the same process but on an international scale.

But there’s more to an organisation’s payroll than handling employees’ salaries.

Global payroll not only requires employers to pay employees in a variety of currencies and at different intervals, but also to comply with ever-changing local payroll regulations, implement tax codes, apply deductions or bonuses, track hours worked by each employee and account for any sick days.

With so many different elements to think about, many international organisations choose to outsource their payroll requirements to a global payroll service provider — giving them the flexibility to scale their payroll up or down seamlessly.

What are the different types of payroll providers?

If you’re choosing to outsource your global payroll obligations, it’s essential that you choose the right provider that’ll work with your business to suit your specific requirements.

Typically, you’ll have to choose between a partner-dependent or an owned-entity provider. But what’s the difference?

Partner-dependent

Partner-dependent payroll providers rely on a network of third-party vendors and are typically engaged in multiple contracts with individual, local payroll providers in each country. This payroll model means that businesses liaise with a point of contact at their chosen provider, who then corresponds with a local payroll partner. These in-country experts are highly knowledgeable about each country’s employment and payroll laws, and their teams will likely be comprised of people who grew up in the country.

The simplest form of partner-dependent payroll models was introduced as the original solution for managing payroll across borders before we had access to advanced payroll technology and software.

This model is still suitable for companies with a lower headcount paying employees in just one additional overseas location. However, any businesses employing in multiple countries worldwide are unlikely to do well with a payroll provider that’s solely dependent on its partners.

Without a centrally managed platform that everyone can access, the communication chain creates scope for error. It slows down processes — risking your business falling out of compliance and often resulting in poor data management. This kind of payroll model also means you and your employees usually don’t have complete visibility over payroll data, which could cause serious problems down the line.

Owned-entity

When you work with a payroll service provider with wholly-owned entities in various countries, they won’t be working with third parties to deliver your business’ payroll. Instead, they’ll have their own in-country experts working across the globe with no involvement from external partners.

Whilst this might be a good way to keep all your employees’ payroll data under one roof, what happens when you want to expand somewhere your payroll provider doesn’t service yet? Unless you’re willing to jump ship (or work with another payroll provider simultaneously), your chosen provider will have to go through the lengthy process of setting up a legal entity in your desired location.

However, owned-entity payroll providers tend to be less expensive and can exercise greater control over their prices, helping you to avoid an extortionate fee charged by a third party. Moreover, sensitive payroll data is kept safer when it’s not being passed through multiple external partners.

What kind of provider should I choose?

Opting solely for either an owned-entity provider or a partner-dependent one comes with both pros and cons. But what if you could access the best bits of both offerings?

When you outsource your payroll obligations to TopSource Worldwide, you benefit from our comprehensive global payroll coverage. Not only do we have entities set up in almost every corner of the world — from Asia to America to Europe — but we also work closely with a trusted network of in-country partners to supplement our global payroll offering. And if there’s anywhere we don’t cover already, we’ll help you identify a tried-and-tested local third party to secure your payroll needs.

Our global payroll model prioritises you and your employees. Blending these approaches allows us to tailor our services to your business’ specific needs — as we know that one size never fits all. We still offer a single point of contact and ensure your employees’ payroll data is safe. Plus, you gain access to our centrally managed payroll and HR database, Portico, which organises and consolidates all payroll data in one secure location. Portico keeps your payroll information and reports in one place, ensuring consistent and standardised processes in every country you operate in.

We also offer a global payment solution that brings down costs, enhances compliance and improves assurance of payment delivery. Whether you’re paying staff in AUD, USD, GBP, EUR or CZK, our one-click global payments solution allows you to pay hundreds of employees in over 100 countries, all through a single consolidated invoice. We send an invoice; you pay it, and your employees get paid. It’s as simple as that.

Our global payroll solution saves time, improves compliance and guarantees total standardisation across your payroll operations, ensuring your employees get paid on time, every time. Get in touch today to learn more about how we can help.

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Published On: April 27th, 2022Last Updated: May 4th, 2022

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About the Author: Paul Sleath

Paul is responsible for global marketing and communications including brand, advertising, digital marketing, and demand generation. Paul has a wealth of experience previously co-founding PEO Worldwide and was also the former managing director of CPM People/Stipenda.