Bringing international employees on board can help your business achieve unprecedented heights. However, it’s not all smooth sailing. You’ll also need to consider running a global payroll, which involves managing multiple currencies, fluctuating exchange rates, and not to mention complex tax regulations.

This blog will help you get a better grasp of what a global payroll is, the challenges you might face, and how partnering with a global payroll provider can help you mitigate any compliance risks. 

What is global payroll?

Global payroll refers to the process of calculating and distributing salaries and benefits to employees who are located outside of the employer’s home country. This also includes tax calculations and salary processing, which need to be aligned with local labor laws and regulations and employment contracts. 

Running a global payroll requires a deep understanding of the target country's tax, financial, and legal matters to ensure that every team member is paid accurately and on time.

Challenges in managing global payroll

The challenges that occur with managing global payroll typically stem from cross-border transactions and varying labor laws and regulations. In this section, we’ll explore these challenges in greater detail. 

Currency and payment methods

With employees in different countries, companies must deal with different currencies and manage exchange rates, which can add extra costs. Moreover, different regions may have specific payment preferences or restrictions, requiring companies to adapt their payment methods to suit local banking systems or digital payment platforms.

Compliance with local laws

The labor laws regarding minimum wage, working hours, and other aspects of employment differ across countries. For example, some European countries require companies to provide certain employment terms, such as 30 days of paid leave for full-time employees and fixed working hours. Staying compliant with these regulations is crucial to avoid legal issues and ensure fair treatment for your global team.

Data security

When handling sensitive employee information across different countries, there are risks such as data breaches, unauthorized access, and non-compliance with data protection regulations. So, it’s crucial to implement secure methods for managing personal details, salary data, and tax information needed for payroll. Common security measures include data encryption during transmission, secure payment gateways, and multi-factor authentication. 

Benefits of using a global payroll provider

Using third-party services for your global payroll management allows you to offload the endless paperwork and calculations and focus only on nurturing and growing your team. Here are some of the benefits that come with using a global payroll provider. 

Automated payroll processing

Automated payroll processing time by handling calculations quickly and reducing mistakes, ensuring things like salaries and taxes are accurate. This is especially important for companies that are growing rapidly and hiring more people in different countries. In addition, outsourced payroll providers are experts in the field, so they’ll be able to handle all aspects of your global payroll. 

Compliance assurance

Understanding local labor laws can be challenging, especially when hiring employees in other countries. However, a reliable global payroll simplifies the process, handling all legal requirements and keeping you informed about any changes in regulations. With compliance managed for you, you can confidently expand your team internationally. 

Employee benefits administration

These global payroll providers also handle employee benefits like health insurance, retirement plans, and paid leave, tailored to the requirements of each region. Businesses that offer these tailored benefits typically experience a higher retention rate, creating a positive working experience for their employees. Plus, this makes your business stand out, making it an appealing option among job seekers. 

One centralised platform for everything

Instead of juggling multiple systems for different countries or regions, businesses can access details about payroll, employee benefits, and compliance from a single, user-friendly interface. This provides a clear overview of global operations, making it simpler for companies to make informed decisions and ensure efficiency. 

Choosing a Global Payroll Solution

At Jobbatical, we partner with different global payroll providers to help businesses manage payroll and compliance when hiring internationally. 

This blog post was created in partnership with Native Teams, a leading provider of global payroll and HR solutions. Native Teams helps businesses of all sizes hire, pay, and manage their international teams across 70+ countries. Here’s how they can help global employers and their employees:

-> Simplified Compliance: Native Teams has a team of experts well-versed in labor and tax laws and regulations across 70+ countries. This ensures businesses can expand globally without worrying about non-compliance and paying fines.

-> Hassle-free payments: Their platform has a large suite of payment tools, including an automated global payroll, a multi-currency digital wallet for managing and storing funds, a client invoicing tool, and a Native Teams card for online or in-store purchases. There’s also a currency conversion tool to help you efficiently manage currency exchanges.

-> All-in-one platform: Every aspect of your employee lifecycle at your company can be managed with Native Teams. Whether it’s running a global payroll, providing localized employee benefits, or relocation services, in partnership with Jobbatical. They’ve also introduced recruitment services, helping you cut down the time needed to find the perfect job candidate for your open positions. 

-> Employer of Record services: One of their core offerings is the Employer of Record (EOR), which assists you in hiring global talent as a local employee. This is possible all thanks to Native Teams’ legal entities, which are spread across 70+ countries. Employees get to enjoy the benefits typically associated with traditional employment and regulate their employment status. 

To wrap up

Running a global payroll comes with its own set of challenges. Luckily, they can be easily tackled by partnering with a reliable global payroll provider like Native Teams. When selecting a provider, consider factors such as their ability to automate payroll processes, their knowledge of different labor laws and regulations, and their capacity to ensure accurate and timely salary distribution for your international employees.