Managing payroll for a local workforce is never easy. It gets even more complicated as you hire employees in multiple countries. Although hiring workers overseas has become easier and more common over the last decade, with each country you begin hiring in, you add a layer of payroll responsibilities.
As your workforce expands globally, you need better resources to manage your payroll across multiple countries. These days, companies with an international workforce rely on multi-country payroll management to handle payroll responsibilities.
Before adopting multi-country payroll, it’s advisable to understand what it is and how it works. Rest assured, this article provides you with all the necessary information on multi-country payroll, why you need it, and how it can benefit you.
What is multi-country payroll?
Multi-country payroll combines and processes payroll for employees across different regions from a centralized location. It relies on high-end technology for processing and managing payroll duties for a long list of employees. Without multi-country payroll, you have to manage payroll separately for employees in each country you employ from.
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What to consider when applying multi-country payroll
To get the most benefit from multi-country payroll, certain factors need to be addressed:
International employment laws
When dealing with payroll across different countries, you must be aware of employment laws. Although some parts of international employment laws are similar across various regions, many crucial aspects vary.
Many things could go wrong when employing multi-country payroll without proper knowledge of the rules. You need to know these laws to guide you when establishing a strategy for your multi-country payroll endeavors.
International employment laws make payroll processing trickier. You must factor these laws into your payroll strategy to process and manage payroll across multiple regions in one centralized location.
Thus, it's necessary to learn the employment laws of each country where you hire employees, no matter how many. This can be long and tedious. That’s why you should consider outsourcing your multi-country payroll duties to a global payroll platform like Skuad.
Another major factor to consider is your employee and the company’s information security. Multi-country payroll involves collecting private employee data for payroll processing. Since multi-country payroll platforms usually use the cloud for data storage, your data needs an extra layer of security.
Consider how you would secure your employees’ information, such as their bank details, tax ID, and contact information. A breach may result in identity theft, data hijacking, and diversion of employees’ salaries. You should invest in data security to ensure your valuable data is safe. Some countries hold employers responsible for their employees’ data protection. Thus, you may be penalized for not properly securing employee data.
International money transfer rates and procedure
Paying global employees is a crucial part of multi-country payroll. Timely payment of salaries is essential to maintaining a satisfied workforce. However, international money transfers can be challenging for various reasons. The transfer rates usually fluctuate and can sometimes be high.
Besides the rates, it might take up to a week for employees to receive their salaries. When the salaries finally show up, some employees may find it difficult to assess their funds. Some may need to pay high currency exchange rates.
Multi-country payroll aims to simplify this process and help employees avoid difficulties when receiving payments. Thus, it is essential to consider international money transfers when working on a multi-country payroll strategy.
International tax laws and procedures
Virtually every country receives income and corporate tax from employees and employers, respectively. Besides tax remittance, employers must also remit social security contributions and report their payroll activities to the appropriate government agency.
For instance, employers in the United States remit taxes to the Internal Revenue Service (IRS). You must know the tax rates and social security deduction amounts for each country where you have employees.
Every country also has different dates or deadlines for payroll reporting. Failure to remit taxes and other contributions before the date may come with penalties, usually fines. Knowing what the law states concerning taxes can help you avoid non-compliance.
Reasons why multi-country payroll is essential
Before discovering how multi-country payroll can benefit you, it’s advisable to understand its importance. From employee satisfaction to maintaining an organized payroll, you need multi-country payroll to achieve compliance and make long-term profits. Here are some of the reasons why multi-country payroll is essential:
To satisfy international employees
Employee satisfaction should be on your priority list when hiring abroad. Global hiring is one of the latest trends among small and medium-scale businesses, making competition for the best foreign talents stiffer. If you have skilled employees, expect them to have their heads occasionally turned with offers from your competitors.
Thus, satisfying them can help you retain them. Employee satisfaction is achievable when you can pay them on time and in their local currency. Foreign employees often worry about fluctuating exchange rates, which can reduce their net income. Multi-country payroll can avoid this problem and keep your employees happy.
To process payroll all at once
Payroll processing on different occasions for your international employees could stress your HR team. It would help if you could process payroll for all your employees simultaneously. Multi-country payroll is essential to perform payroll at once. With this platform, your team can manage payroll duties at a dedicated period to have time for other important HR duties.
For a standardized international team
When running a company, you want every team or franchise to operate under the same vision regardless of location. This is usually more challenging when you have a global team on various continents. A global workforce operating under the same code can easily exhibit the company’s DNA.
Thus, it would help if you had multi-country payroll to help bring your international team function as a well-oiled machine. By managing payroll activities on one platform, having your employees working with the same vision becomes more achievable.
For organized payroll processing
For successful payroll processing cycles, you need organization. Besides ensuring smooth payroll processing, the organization also helps you comply with payroll and tax laws. This can be much easier when you process and manage payroll from one central location. With multi-country payroll, you can easily create a payroll structure, keep payroll data secure, and detect non-compliance threats in time.
Benefits of multi-country payroll
Properly implementing multi-country payroll may pay off right away. If you’re looking for more reasons to adopt multi-country payroll, explore the following:
Simplified payroll processing
Payroll management for an international workforce has never been simpler. Multi-country payroll software presents a centralized dashboard that allows you to control the payroll process. The software is easy to navigate, with self-explanatory sections that require no more than average digital competence to operate.
By clicking a few buttons, you can make crucial commands on your dashboard, such as disbursing payments. That’s why you should partner with a multi-country payroll platform like Skuad. Our payroll platform lets you make payments to your employees regardless of location with one click.
The risk of non-compliance increases with the number of employees you have and the more countries you hire workers in. Compliance is crucial to staying in business, not to mention avoiding time-consuming and expensive legal problems.
Complying with international laws can be difficult, even for global payroll experts. The inability to comply with these laws can be detrimental to your hiring goals. However, employing multi-country payroll increases your odds of avoiding non-compliance penalties.
These software programs make accurate calculations, record payroll data, and disburse salaries when due. You’re only a few steps away from full compliance with accurate calculations and transparent recordkeeping.
Centralized payroll management
Deducting employee taxes and determining their net income without multi-country payroll would be difficult and time-consuming. You must carry out payroll processing separately for each country your employees work in.
Fortunately, multi-country payroll enables you to simultaneously manage global payroll in one place. Regardless of how far-flung your employees are, you can manage their payroll simultaneously on your dashboard.
Timely payment disbursement
You and your international team of workers benefit when you can disburse their earnings punctually and accurately. Multi-country payroll software helps save time when processing payroll by performing multiple complex payroll calculations within a short period. This reduces the time it takes to calculate tax and other statutory contributions before paying employees.
Manage global payroll seamlessly with Skuad
If you need a multi-country payroll platform to smooth the path to your hiring goals, choose Skuad. We currently have a legal entity in over 160 countries, helping businesses expand their workforce overseas. Skuad also offers you high-end payroll processing technology to manage your global workforce, no matter where they are.
On Skuad’s multi-country payroll platform, you can access each employee in every country on one centralized dashboard — yours. With Skuad, you stay in the driver’s seat so that nothing gets past you. Book a demo today to see how we can ensure your access to the perks of hiring globally.