Businesses of all shapes and sizes now have remote teams situated all around the world. But if you’re looking to expand your business into the global market, you’re going to be dealing with global payroll. All of your worldwide employees need payment — whether it’s a yearly salary paid out at the end of each month or they’re contracted on an hourly rate and paid each week. And if you’re employing in several countries, the currency, payment frequency and language will all differ.
There’s not much room for error, either. Payroll is one of the most time-sensitive and crucial things for businesses to get right, but it’s often complex and requires a lot of arduous admin.
So, how can you ensure best practice across your global payroll operations to stay on the right side of compliance?
A long list of considerations
If you’re thinking about hiring employees overseas, you’ll have to factor in all local payroll legislation and customs whilst paying your workers in their local currency. Whether you’ve got one employee or one hundred, each worker on your company’s payroll needs to be paid the right amount at the right time — every single time. And if you’re tackling payroll in-house, you’ll know how tricky it is to manage payroll in just one country, let alone in multiple across the globe.
In the UK, for example, you need to think about deductions such as National Insurance contributions, pensions and income tax. But each employee has a different amount deducted from their salary based on various factors like how old they are and how much they earn. Benefits and discretionary benefits are also something you’ve got to think about when calculating each employee’s take-home pay — perhaps some employees are taking advantage of a salary sacrifice scheme to cover the costs of train travel?
The frequency of salary payments often differs from country to country, too (in the Philippines or New Zealand, employees are typically paid every two weeks). Many nations also require a 13th or even a 14th-month bonus salary payment that’s paid either as one additional payment or spread over two or three months.
Essentially, there’s a lot to get right if you’re paying workers on a global scale. But what actually happens if you get it wrong?
A payroll compliance minefield
Payroll processing can be complicated enough, but there’s an added layer of complexity when managing payroll across multiple countries and currencies.
Companies also tend to slip up on global employee benefits. Are you required to offer healthcare insurance to your employees, or does the responsibility fall to the government? Are workers on maternity leave entitled to the same pay as those who aren’t? Is a sick pay policy mandatory in every country around the world?
Your employees trust you to pay them the right amount at the right time to cover their own time-sensitive outgoings, such as rent and mortgage payments, school fees or travel costs. If you miss a payment or pay the wrong amount, it’s likely to damage your relationship with your employees.
And remember: payroll doesn’t just involve paying your staff. As an employer, you’ve got a dozen reporting responsibilities with forms to submit to the local payroll authorities to demonstrate that you and your employees have paid the right amount of tax or social security contributions. However, inaccuracies in your payroll reports can result in serious financial penalties, so it’s vital to take reasonable care and ensure someone has gone through your business’ payroll with a fine-toothed comb.
Avoid global payroll errors with ease
Most businesses with global operations outsource some of their payroll. It’s the obvious solution: let the payroll experts deal with the hassle of global payroll whilst you focus on running your business.
Outsourcing global payroll services can also help you to eliminate the headaches associated with international payroll management. And unless you’re a huge organisation, you’re going to want to outsource your payroll. Global payroll providers have vast experience, knowledge and skills which they can leverage and will have invested in processes to ensure a seamless solution.
TopSource Worldwide is an employer of record and global payroll service provider with extensive experience operating on a multi-currency, multi-territory and multi-jurisdictional basis. We’ll mitigate the risks of paying an international workforce and ensure your business is 100% compliant with payroll’s ever-changing regulatory landscape. By outsourcing your global payroll to TopSource Worldwide, you’ll benefit from our centrally managed, multi-country payroll platform that consolidates all payroll data streams, automates workflows and standardises information.
We can also support you with our international payments solution as part of our fully managed payroll service. We offer a range of currency and payment capabilities in a growing number of countries, enabling you to reduce your transfer costs, improve compliance and make sure your employees get paid on time, every time. We’ll manage and pay all your deployments across the globe, providing you with a single consolidated invoice in whichever currency suits your business, so you don’t need to worry about buying or managing currency in-house.
Don’t let concerns about global payroll hold you back from employing an international workforce. TopSource Worldwide is your trusted payroll service provider that’ll ensure seamless payroll across your teams — no matter where in the world they are. Get in touch to find out more.