Remote Payroll Compliance Guide


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The pandemic has impacted not just the present but the future as well, from where employees should work, home or office. It had forced companies to allow employees to work-from-home for a few months when the pandemic was at its peak. Now, many companies have decided to permanently shift to fully-remote or hybrid work models and will be continuing to do so.

Gone are the days when there was a need to set up a subsidiary whenever you want to hire employees from foreign countries. With the support of an Employer of Record (EOR) like Skuad, you can now employ a world-class global workforce based simply on skill rather than geography. Employers and job searchers are no longer constrained by location and can seek out the finest individuals and opportunities from anywhere in the globe.

However, maintaining  global payroll compliance with international payroll regulations for remote workers takes time, resources, and local knowledge on pay days, tax contributions, benefits, time-off and more. Even the slightest misstep while setting up a payroll system in a new country can result in heavy fines, penalties and lawsuits.

This does not, however, imply that you should avoid employing globally or accept the significant administrative cost that comes with it. This article is your complete payroll compliance guide which will not only help you simplify the process of paying remote workers, but also show you how to leverage Skuad’s global payroll platform to reduce risk, save time, and boost employee satisfaction.

Talk to Skuad’s payroll experts to know how.

Knowing the Payroll Requirements

If you want to build a remote team globally, putting remote talent on your payroll isn't enough. Why? Because, in most cases, the country does not allow businesses to put their remote employees on a different payroll than the ones domestic employees have. You must fulfill the same responsibilities as any other domestic employer in a foreign nation. 

For example, if you hire a Portuguese employee, you must follow their tax regulations, which include individual income tax for Portuguese employees, social security fees, VAT, withholding tax, and corporation taxes. Even though your employee is not a Portuguese citizen officially, they are deemed one legally if they spend more than 183 calendar days (or more than six months) every year in Portugal, have a spouse with legal residency, or own property in which they live.

In order to simplify this, it’s beneficial to partner with an EOR like Skuad, which not only helps you with the hiring and paying but will also streamline the complete process of payroll and compliance in the country of employment.

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How to Pay Remote Workers and Handle Currency Exchange

Paying overseas personnel may be challenging, especially because the costly bank transfers and currency swaps might cause your employees' salaries to vary significantly. And it's never a smart idea to leave your team wondering how much they'll get next. With Skuad, you don't have to worry about currency conversions and fluctuating exchange fees every time you pay your team. We provide you with a platform that’s well equipped with all that's needed to pay your employees on time, compliantly. Check out our Salary Calculator, to instantly calculate estimated total cost of employment in 120+ countries, including taxes, employee and employer contributions, and more. 

Schedule a demo to know more about how we handle payroll for remote employees in over 160 countries.

Employer And Employee Contributions for Remote Talent

Employer and employee contributions are required payments that go toward a delayed benefit, such as a pension or healthcare. They must be paid in line with the laws of the nation or region in which the employee resides, thus it is critical to validate your remote worker's tax residence before hiring them. 

The following are examples of common employee and employer contributions:

  • Payroll taxation
  • Healthcare
  • Unemployment benefits
  • Superannuation or pension money

Privacy and Data Security

As you begin to build your remote workforce, the number of network endpoints and possible cyber-attack vectors grows. Mobile devices, wireless networks, and even unintentional data leakage in public places may expose your company to unwelcome risks.

To prevent data loss, you must ensure that you have ironclad security and procedures in place. But, it’s challenging to learn about cross-border data transfer rules and the implications of exchanging information about global clients with employees in the home office. Instead, you can simply partner with Skuad to protect your data privacy from all types of cyber threats and hazards.

Partner with an Employer of Record

If you would start to manage your payroll taxes for remote employees in a traditional manner, it would take months, and thousands of dollars for each country to ensure that everything was in order, even before starting to hire your employees. With Skuad, you can build and pay an exceptional global team, without the added cost, time or headache. 

Using an Employer of Record (EOR) like Skuad to pay your remote employees globally is the most cost-effective, time-saving, and efficient method, while staying within each country's legal framework. 

Skuad helps you with expanding remote employment in 160+ countries. You won't have to worry about guaranteeing tax compliance, completing paperwork, dealing with government bodies, keeping track of local employment laws or processing payroll for remote workers, once you have partnered with an EOR. So you can hire and pay your global team without setting up a subsidiary, while our local entities take care of all things HR in the country of employment. 

Book a demo with Skuad experts to know more.

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