Global payroll is a key component to international expansion, but requires careful consideration and support.

Managing payroll in a new market or multiple markets is a complex but important process for employers. Companies often come to us overwhelmed by the variety of factors to consider, including currency exchange rates, global and local payroll compliance, cost of living factors, and managing employee benefits, all of which can make global payroll management challenging.

The good news is, whether you are hiring in a new market for the first time, or you already have employees in multiple locations, with the right support you can manage payroll and the related reporting and compliance requirements seamlessly.

What is global payroll?

Global payroll is the all-encompassing term used to describe the processes, procedures and outcomes required to manage payroll compliance responsibilities globally.

This involves navigating various key tasks including compliance with local labour laws, tax regulations, managing payments to employees and tax authorities, all whilst navigating cultural and language differences, ultimately ensuring you remain compliant as an employer in every jurisdiction and your employees are paid accurately and on time.

What are the challenges of managing global payroll operations?

Time zone navigation: Payroll is a deadline driven process, with the aim of ensuring that your employees are paid accurately and on time. Operating in significantly disparate time zones can, if not managed effectively, cause significant delays in your monthly process leading to rushed processing and the potential for errors.

• Diverse compliance requirements and deadlines: Each country has its own labour laws, tax regulations, social security requirements, and employment benefits that need to be adhered to. Keeping up with frequent changes in these laws can be a significant challenge.
• Communication barriers: Language differences can lead to misunderstandings and errors in payroll processing. Clear communication is essential to avoid discrepancies and delays.
• Cultural sensitivities: Understanding cultural differences in work habits, compensation expectations, and holiday observances is important for both employee satisfaction and compliance.

What are the benefits of working with a global payroll provider?

Global payroll providers offer numerous benefits that streamline payroll management, ensure compliance, and enhance overall efficiency. By leveraging their expertise, technology, and resources, companies can effectively manage the complexities of global payroll, improve employee satisfaction and focus on strategic business objectives.

• Compliance and risk management: Payroll is an ever changing industry, Global payroll providers are able to ensure consistent standards of service across all countries by utilising in country experts to manage compliance risk.
• Centrally managed standardised processes: Global payroll providers can help you to maintain consistent and accurate processes across all jurisdictions, adapted to additional steps that may be required for local requirements.
• Scalability, flexibility and responsiveness: Global payroll providers have an existing network of partners ready to quickly support your expansion into new territories. They offer solutions that are able to grow with your company at all stages, avoiding the need for significant investments in payroll infrastructure.
• Management of multiple stakeholders: If you’re looking to expand across multiple jurisdictions, the web of internal and external stakeholder relationships to manage is likely vast. Global payroll providers can take on this responsibility, engaging with employees, providers and regulatory bodies on your behalf.

How do I ensure payroll compliance with local labour laws?

By utilising in country experts, global payroll providers are able to support you through the myriad of regulatory complexities in each country where you operate. From implementation through to managing business as usual processes on a monthly basis, your provider can help you meet your obligations at every stage. Key factors that will influence a successful approach to compliance include:

• working with knowledgeable local country experts;
• managing compliance calendars to ensure that all deadlines are adhered to; and
• ensuring regular updates for compliance and legislative changes.

When should I outsource global payroll operations?

Global payroll operations can be outsourced at any point in your expansion journey.

Whether you are looking to expand into your first overseas territory or you are operating in multiple markets with various external providers, engaging with a global payroll provider will deliver various benefits.

What should I look for in a global payroll provider?

• Global reach and local expertise: Ensure that the provider has the ability to operate in all countries you seek to expand in, they have an excellent understanding of local labour laws/payroll requirements and have a proven track record.
• Scalability: Looking beyond your initial expansion objectives, select a provider that will be able to service all territories that you may look to expand into in future, and with the ability to service both small and larger population headcounts as you grow.
• Cost, pricing and scope: Look for a provider that aligns with your budget and offers a transparent pricing structure, ensuring that once you are committed you aren’t hit with hidden costs.
• Prioritises employee user experience: Choose a provider that can work with you to create a positive and consistent user experience for your employees,.
• Payments solutions: Ensure your global provider is able to supply payment solutions in all countries where you plan to operate.

How ZEDRA can help

At ZEDRA, we provide global payroll outsourcing services to companies expanding into new markets for the first time, as well as multinationals with existing international operations.

Whether you require Payroll Compliance advice, support with Paid Time Off (PTO), Tracking & Salary Sacrifice arrangements or payment management including banking support, we are here to help.

We can also help you with HR including:

• Employee onboarding and offboarding
• Employment Contracts & Handbooks
• Employee Relations Assistance
• Salary Benchmarking
• Talent and Performance Management
• HR Support, Secure Employee Record & Compliance Management

Contact Louise Richardson (https://www.zedra.com/people/louise-richardson/) to find out more.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. This article originally appeared on ZEDRA's website here: https://www.zedra.com/insights/managing-global-payroll/.