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Money, money, money. We know it makes the world go around, but you’ll be forking out a lot when it comes to your global payroll. You need people for your business to run, so payroll isn’t something you can skimp on.  

It’s easy for payroll costs to spiral out of control, especially when you’re playing on the global stage. You’ve got staff salaries, taxes and social security and that’s the bare minimum to deal with. Add to that the payroll software, infrastructure, time and the sheer amount of people needed to run it, and you’ll quickly see your organisation’s bank balance dwindling.  

However, we love to help, so we’ve put together some tips and tricks for effectively managing your global payroll costs. Read on! 

Why manage global payroll costs?

For many global organisations, an eye watering 60% or more of their operating costs are spent on payroll. So, it makes sense to cut costs where possible. The benefits of managing costs are obvious: you’ll save precious money, improve the efficiency of your payroll machine and even increase compliance.  

What actually affects your global payroll costs?

Global payroll costs can be affected by pretty much anything and everything! Discussing it all is beyond the scope of this little article, so we’ll briefly cover a few factors you’ll inevitably face when running your global payroll.

The main players

Employee compensation, taxes and social security contributions, as well as benefits and allowances, are all significant components of payroll cost. It’s inevitable that salaries, wages, bonuses, and incentives are the big players! These can vary based on local labour market conditions, minimum wage laws, collective bargaining agreements and employee skill levels.

Complying with local legislation

Complying with local labour laws, regulations and tax requirements can all send costs into a spiral too. You’ll need to take into account mandatory obligations like minimum wage laws, overtime regs, international payroll reporting and tax withholding rules to boot. Whew! We didn’t say it’d be easy. But it can be done – hang in there. 

Exchange rate fluctuations

Exchange rates are bound to affect your costs too. Unfortunately, it comes with the territory when you’re a big player operating in multiple countries. Exchange rates rising and falling between currencies can wreak havoc on the value of your teams’ salaries and benefits (along with any other expenses). Account for this. Next!

Cost of living and inflation

Then there’s the good, old-fashioned inflation and the cost-of-living factors. Of course, these differ massively in different countries. Looking to attract top talent in London or regional India? Crafting attractive packages that’ll lure staff and retain them will look vastly different in London compared with regional India, where the cost of living and expectations are considerably different. And in countries where inflation is at an all-time high, that’ll factor too.  

Industry-specific costs

You’ll also need to take into account industry-specific costs. There’ll often be unique payroll considerations here. For example, if the work is hazardous, you may have to shell out more for additional benefits, like enhanced insurance coverage. You’ll also be looking at paying a premium for highly skilled people. Tech and healthcare are just two industries that command top dollar salaries. 


We haven’t even mentioned the admin side of things yet. This goes hand in hand with compliance. When taking care of compliance matters, like tax filing, social security contributions and meeting employment regulations, you’re going to be looking at costs associated with administration for all of these. Achieving full global payroll compliance requires a dedicated internal payroll team and specialist software (or services). Then you’re going to want legal advice and budget for those all-important audits. 

Mobile workforce

Mobile workforce and/or expatriate employees? Be prepared to spend some of your budget on moving people here and there. Travel, relocation allowances, tax equalisation and housing your employees will all eat a sizable chunk into your payroll costs.   

Legislative changes

Another crucial thing to take into account are changes in legislation. We’re talking about tax reforms, labour law amendments and modification to social security systems. These can all directly impact your payroll expenditure. Make sure you stay up to date with any changes to legislation as that’s also key in managing your payroll expenses.

But help is at hand! Onto the strategies…

We know it’s a lot to take in, but help is at hand! Let’s get into the strategies to help you manage your payroll costs and save you some precious money and time (while staying compliant, of course). 

Centralise your payroll management

One way to cut costs is to centralise your global payroll management. What does this mean? It’s basically using one payroll platform to manage everything, across different countries and regions. This way of working means managers are all on the same page, following the same methods and processes. Consolidating your operations across the miles can save you money through economies of scale and uniform, standardised practices. 

Run regular audits

Regular audits can flag up errors, identify inconsistencies and determine the areas in which you might be able to make savings. Auditing your processes, tax calculations, benefit deductions and compliance are all vital for making sure everything is as accurate as possible. It goes without saying that audits are instrumental in identifying areas for your organisation’s improvement.  

Optimise pay structures

It’s time to have a look at your compensation structures. Doing so can make sure you’re in-keeping with market standards and your organisation’s goals. Going through your pay structures with a fine-toothed comb will make sure your offerings are competitive, fair and cost-effective. If your people get decent compensation, they’re much more likely to be productive and happy too. Win win!

Keep up to date

Ah, it’s those pesky legislative changes again. Make sure you’re ahead of the game when it comes to ever-changing legislation in labour laws, tax regulations and yep, you guessed it, payroll requirements for every location you do business in. Staying informed about changes and actioning them keeps you compliant. And what does compliance mean? No nasty financial hits from costly penalties and fines. 

Outsource your payroll

One way to take all this worry off your plate is to outsource to a specialised global payroll provider. Finding the right international payroll provider will save you grief, time and money. There’s also the fact that they’ll have bags of local expertise you can leverage, like knowledge of local regulations and compliance. What’s more, when all of that is off your plate, you can focus your energy and resources on core business operations.  

Monitoring and control overtime

Employee overtime can work out to be pretty expensive for payroll. You probably won’t want to do away with it all together, but reducing overtime can help to save costs. Having systems in place to monitor and control overtime can be helpful. Try having clear policies in place, using scheduling tools and promoting a healthy work-balance to your employees to reduce overtime.

Carry out cost-benefit analyses

Make sure you take frequent stock of where you’re at with the costs of your processes and of the resulting benefits. Does what you’re doing actually pay dividends? Look for areas where you can potentially save money. As for new tech and payroll initiatives, ask yourselves if the return on investment is worth it.  

Plan for the long-term

And last, but not least: look to the future. Anticipating your needs in advance, like workforce, skill requirements and market trends will help to make sure you keep payroll costs manageable, sustainable and fully aligned with your organisation’s objectives 

Save money, time and your sanity…

Make no bones about it: global payroll could cost an arm and a leg! But with the right help, your organisation stands to benefit hugely by investing in a payroll provider. And we happen to know a particularly savvy team who fits just the bill.  

Here at Just Payroll Services, our fully managed international payroll service shoulders the burden of global payroll costs and complexities, giving you room to focus on what’s really important to your organisation.  

Fancy a chat about it? We’re all ears. Just get in touch.