PLAYROLL BLOG

Insights into global expansion & employee retention

Published: July 27, 2022

How Companies Set Salaries for Remote Jobs

If you are a recruitment manager, then you are undoubtedly well aware of the many changes that have occurred in recent recruitment. As a result of these changes, traditional work patterns have been replaced by remote jobs that require different metrics when setting salaries. 
How To Pay International Employees

The shift to telework in the labour market is partly due to the sudden realisation that working at home is no longer considered curious but legitimate employment. 

Remote employees can fill any position from anywhere in the world without having to be in the office. In addition, employees demand flexibility, and companies are saving money while benefiting from the availability of more workforce. It seems to be mutually beneficial. However, one of the vaguest issues that employers have to tackle is the salary of commuters. 

Undoubtedly, there are various factors that determine whether a payroll company is willing to pay a remote worker. Experience skills, occupations, and so forth must be taken into consideration. And if you hire a part-time and full-time telecommuter, the rates can differ significantly. In some cases, the hourly wages of part-time remote employees are higher than the hourly wages of full-time in-house staff.

Estimate the additional cost of equipment

In addition, companies need to estimate the additional cost of equipment. Does the remote worker need a dedicated computer with advanced security features and extended warranty options? How about desks, chairs, and printers? Are OSHA guidelines in place?

Clear home office setup guidelines and guidelines that remote staff should follow should be provided or discussed in advance. 

The company also recommends that teleworkers be equipped with the materials they need to perform their jobs efficiently. From time to time, companies simply provide benefits for additional work-related supplies. Then you can discuss whether you need to provide additional provisions. 

Teleworkers are considered employees in the country of residence, not the country in which the company is located.

What about remote employees working for companies in different cities in the same country? For example, a company that employs IT professionals in New York City may pay higher salaries than employees in Dayton, Ohio, but both perform the same job.

This consensus can go against traditional payroll analysis. Nevertheless, it depends on economics and practicality. Living expenses vary greatly by city and country. 

When it comes to global locations, telecommuters working for the same company in different countries automatically experience salary differences due to currency fluctuations. For example, teleworkers in Slovenia do not receive the same salary as teleworkers in countries other than the EU, such as Switzerland. 

Personnel costs are an important part of any business, and exchange rate fluctuations can lead to unexpected increases in labour costs. If foreign exchange risk is not properly forecast and managed, the company’s annual profits could be lost.

Even if the exchange rate makes the salary paid in the company’s home currency much higher, it still has to be paid to the employee. 

Sites such as Playroll.com provide state-of-the-art payroll solutions that provide enterprises with the ability to track and analyse compensation strategies to determine how to design and manage employee compensation and profits. As an employer, it is important to ensure that remote talent are paid fairly without spending more than necessary. 

Determining what to pay remote talent

The salary of a traditional job title that must be physically present in the office is usually determined after the company has researched a database of data. One of the most important factors  analysed is the amount paid by other employees  in the same field  in the  immediate vicinity of the company

These are the three key factors in determining remote payroll. 

1. Company location and salary 

Salary is measured only by the responsibility of the position at a certain level. If the teleworker is in an expensive city, some flexibility is acceptable. Overall, salaries are structured regardless of the location of the employee. 

Barometers are usually set between relatively expensive and cheap locations. 

 On the other hand, commuters living in expensive districts can earn income only based on where the company’s headquarters are located. If it is in a cheaper area, it can mean fewer wages. Other companies can be determined according to the national average. Some business owners who hire remote employees want the same salary results wherever their home employees are. 

2. Remote worker location and salary 

 If a company knows how to properly calculate salaries based on the location of remote talent, it would be a good idea to place employees in one high-cost metropolitan area while being employed in other regions. 

There are advantages. If the salary is based on the location of the teleworker, those who work from home in San Francisco will need a different salary than those who work in Kansas City, Missouri. Therefore, flexibility is needed when considering salaries based on the location of employees rather than the location of the company. 

The employer of a home-based employee should regularly check the laws of the city, state, or country in which the employee is located to determine which employment rules and regulations apply. 

3. Salaries affected by market trends regardless of location 

For mid-sized city-based companies, comparing salesperson salaries with benefits and bonus offers in the same market is an ideal medium for determining salesperson salaries. 

You may notice it. In this approach, businesses pay domestic employees for the work they do. The rate is fixed to some extent and is not particularly dependent on the location of the worker. Payday is determined based on several factors specific to your position. 

However, these remote employees are usually located on the outskirts of major cities, regardless of the amount the company pays or the location of the city on a global scale.

In most cases, businesses offer additional features such as bonuses that can significantly increase an individual’s income. Still, every job has a specific salary range. 

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