Insights into global expansion & employee retention

Published: July 18, 2022

A Guide to Paying International Employees for Services

Managing an international payroll is definitely no walk in the park, with endless ribbons of red tape crisscrossing your way forward. First off, you must decide whether to manage your payroll with a global payroll provider or in-house. In this blog, we have compiled some important steps to assist you.
A guide to Paying international employees for services

Managing Your International Payroll In-House

Step 1: Register a local legal entity

Your business must be lawfully authorised to operate in the country where the employee lives. Therefore, you will need to hire legal experts worldwide.

Step 2: Gain a deep understanding of local labour law

Each country has specific laws and regulations that must be complied with to avoid costly mistakes and fines. For example, there are tax registration deadlines to reach before the first day of work and different requirements for the next tax month. Failing to comply with regulations results in not being able to hire.

Step 3: Handle gathered data correctly

There are two main factors involved: obtaining employee data and ensuring data governance.

Payroll requires a specific list of employee information types in each country. As soon as these details are entered into your payroll software, you become the data administrator, so you must choose a solution compatible with local data protection laws. 

Step 4: Verify employees’ eligibility to be hired

Once you have collected the data, make sure the candidate is eligible for employment. A visa or resident status does not necessarily mean that the individual has access to the labour market. If you hire someone not authorised to work, you may face legal issues and hefty fines for your business. 

Step 5: Process payments correctly

After you have verified eligibility and notified the respective offices, you can plan payment. Your employees’ salaries are paid according to legal regulations and contract agreements. Some salaries are paid fortnightly, and some are paid monthly. It may be necessary to process payroll multiple times per month in every country where you have employees to ensure your payment schedule complies with local laws.

Step 6: Submit declarations to authorities

Finally, your company must pay benefits and taxes for the employee and submit declarations to inform authorities. Overall, the more staff you hire internationally, the more deadlines for benefits, tax, and salary payments you will have to monitor.

Using an EOR to Pay Global Employees

Step 1: Choose your EoR partner carefully 

There are plenty of options available when it comes to global payroll providers. Assess your choices carefully and choose one which fits your business best. Some questions to ask: 

  • Do they own their own local entities?
  • Do they offer legal expertise?
  • Can they handle permanent and contract workers on one platform?
  • Do they charge fees such as a percentage of salary or other extra costs?

Because there are many variables, some payroll services charge fees. Choose a global partner with a transparent pricing model that saves you money and is fair.

Step 2: Prioritise your employees’ experience

Accurate, timely payroll processes have a direct impact on forming a positive employee experience. Only global payroll providers that fully own their infrastructure can guarantee an efficient payroll because they do not rely on any third party.

Step 3: Pay the correct salary for location, role and person

You should create a global compensation policy to pay your workers appropriately. To ensure all employees receive fair compensation, you should conduct a full review, taking into account their responsibilities, location, and other factors. You can easily set up this structure with the help of your global payroll provider. 

Step 4: Consider if you want your own entity in future

An EOR pays fast, easily, and in compliance with government regulations. Furthermore, they can assist in creating your own entity if you choose to go that route. So how does using an EOR assist, international employees?

Working With an EOR Service Has Plentiful Advantages:

Reduce your costs

An EOR can save costs substantially. You do not have to employ staff to handle salaries, tax calculations, legal advice, benefits administration, payment processing, and endless paperwork. With an EOR handling all your payroll processes, your HR can focus on managing a suitable environment for your global team.

Ensures global compliance

Wrapping your head around local labour law is difficult, and it only gets harder when onboarding employees in other countries. However, with a good EoR, you can hire without complications. They will ensure that you meet all legal requirements and keep you up to date on changes in laws. So without having to worry about compliance, you can hire internationally with confidence.

Stronger data security

If payroll is handled in-house, fraud is more likely to occur due to the increased access to data. With a global payroll partner, you get a dedicated team of specialists committed to keeping your data secure, which improves data security.

Employee satisfaction

In addition to making sure salaries are calculated right, EORs ensure all payments are on time. Working with a dedicated payroll partner reduces the risk of errors. In addition, international employees will have a great working experience when your payroll is fast and reliable.

The Fastest, Easiest, Safest Way to Pay International Employees 

If hiring internationally has kept you up at night, you can finally rest easy. With an EOR service provider, you can grow your global team with confidence.

Playroll is one of the leading global payroll and contractor management services around the world. We are happy to:

  • Accelerate your international hiring goals
  • Streamline your payment process and reduce costs
  • Simplify payments in our easy-to-use platform
  • Guarantee law compliance with our global team of legal experts

If you are ready to begin onboarding around the world, you can sign up in a matter of minutes. Have questions? Contact us and one of our global employment experts would be happy to help.

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