People are the most important part of your business. So, making sure that you’re paying them correctly is vital. When you’re getting ready to expand globally, you need to consider what your options are for a global payroll solution and look at what is best for your organisation—and most importantly what is going to work best for your people.
Let’s look at what global payroll solutions are out there, and what you need to consider when selecting one.
1. Global payroll software provider
A global payroll software provider is a company who offers payroll processing in a range of countries around the world. This works like a normal outsourced payroll solution, where you provide the company with your employees’ information, payroll data, and any added payments such as bonuses and they process the payment for you.
This option is a great all-rounder if you have a few employees in each country you’re operating, as it will allow you to keep your payroll processes consistent for all employees and should offer you reporting functionality across all your employees. You’ll also find that with this solution you’ll most likely have a point of contact in your native language who will help in translations of any information from the other countries.
However, it can have some downsides as it often means that the advice and information for each country is a bit more general. They likely aren’t specialists in each country and often aren’t based in the country they’re running your payroll.
2. Employer of record (EOR)
An EOR is an option to pay your employees abroad which also comes with the added bonus of helping with all the admin tasks of employment. An employer of record is a company who legally hire the talent you’ve found and will process all hiring paperwork, payroll, and even termination documents.
This solution is often selected when you need to hire someone quickly, temporarily, or you’re only planning to hire a small number of people abroad ever. If you are looking for a long-term expansion plan with multiple employees, then an EOR is usually not the best solution for you.
3. Local payroll provider
A local payroll provider is a fantastic choice if you’re looking for specialist knowledge. As they will be based in the country you’ve expanded to, they will be up to date with all legislation changes and best practices in that country. If you’re just starting out with global expansion and are only based in one or two countries this can be an excellent solution for you.
This option can become quite complicated to manage quite quickly if you’re expanding to multiple countries, as you have to communicate with each local provider regularly. This means you might experience language barriers, time zone issues, and as well different processes from each provider which can mean additional work.
You might find that with this option, some countries will also require you to have local bank accounts in the country.
4. Global payroll solution
If you’ve looked at a global payroll provider and a local payroll provider, then a global payroll solution might just be the best of both worlds. They provide the single point of contact that a global payroll provider does, but use local payroll providers to actually process the payroll. This basically means that they take the headache out of communicating with multiple local providers.
Global payroll solution providers are a great solution as they work closely with local providers and therefore have the detailed knowledge of the countries they operate in. And if they don’t, they have a source to help gain the information. The biggest issue with global payroll solutions is that they often don’t operate in every country so you’ll need to consider what your future plans for expansion are and if that company can provide the services you need.
5. In-house payroll
If you already have an in-house payroll team you can process payroll in different countries yourself. You need to find software which is suitable for transactions in all the territories you have expanded into. This option is usually the most cost effective, however, can be very resource intensive due to the additional work it requires to understand paperwork in different languages, calculate payroll in different currencies, and keeping up to date with all the news in each country your employees are based in.
In house payroll can also involve significant investment into the software you’ll need to run your global payroll efficiently and compliantly.
How to decide
When it comes to choosing which global payroll solution is the one for your business, it can be a little bit difficult. We understand that many of the options could be suitable for you short term, but you need to look at your long-term business plans and decide what it best for you and your people.
- Compliance: You need to consider which of the solutions will provide you with the best global payroll compliance in each country you are based in.
- Data security: As we mentioned at the start of this, your people are one of the most important parts of your business, so look for a company that you feel can keep their data secure.
- Employees: Not only do you need to keep their data secure, but you need to select a solution that will provide them will a good reliable service so that they are paid on time and correctly.
- Your future plans: If you know that in a year or 2, you’re going to expand your business further, then you need to look at a solution which is future-proof.
- Budget: You should consider getting a quote for the services from all the suppliers before making your decision on one specific solution. This is because the cost can vary significantly and it’s important to consider what is right for your businesses budget.
If you’re looking for a multi-country payroll provider then we might be the right choice for you, find out more about our international payroll offering today!