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Global payroll technology: how can a payroll solution transform your business?
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James Doman-Pipe
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If your business is looking to globally expand, you need to get to grips with the complexities of international payroll.
And, like everything else in the modern business world, understanding and adopting technology is key to this.
But what exactly is global payroll technology? And — more importantly — how can it help your business?
In this article, we’ll explain everything you need to know, and help you choose the right solution for your organization — starting with the basics.
What is global payroll?
When you have employees in multiple countries, paying them is just one part of the process. You also need to manage their taxes, and comply with their country’s labor laws. All of these activities come under the umbrella of global payroll.
Jump straight to a key chapter
The main components of this process include:
Calculating salaries
Paying them on time
Tracking and reporting payments
Distributing pay slips
Withholding and paying taxes
Complying with local labor laws
What is global payroll?
Hiring global employees is easy and scalable with the help of the right global payroll partner. Whether you’re planning a global expansion, or looking for payroll efficiency, this guide will help you understand global payroll and its benefits.
What is global payroll technology?
Global payroll technology refers to the tools and software that organizations use to manage payroll processes across borders.
It enables businesses to automate and standardize payroll operations, including payroll processing, tax compliance, time and attendance tracking, benefits administration, and reporting.
It also helps solve many of the key challenges of global payroll management, such as:
Differences in (and the complexity of) local tax laws
Social security requirements
Employee misclassification risk
Labor law compliance requirements
Currency exchange rates
What are the benefits of global payroll technology?
If your business is expanding across borders, then a reliable global payroll platform — like the one offered by Remote — can deliver a wealth of benefits.
Specifically, it enables you to:
Streamline your payroll processes
By reducing manual input, you can save time and ensure your employees receive accurate, timely compensation. This includes automating tasks such as data entry, salary calculation, deductions, taxes, and other payments. Additionally, you can gain real-time access to financial data across all locations worldwide.
Moreover, global payroll technology allows you to integrate data from multiple systems (such as HR and finance), providing a comprehensive view of your payroll expenses. This integration ensures that all payroll-related data is current and accurate, resulting in fewer discrepancies and less reworking.
Comply with employment and tax laws
Every country you hire in has different employee rights, taxation obligations, and social security contributions. Complying with all of these requirements can be daunting — for any organization.
Global payroll technology can automatically incorporate any changes in regulations, reducing the risk of penalties, legal disputes, and reputational damage resulting from non-compliance.
Bolster your data security
With a reliable global payroll platform — like the one built by Remote — you can securely track, manage, and store employee data, such as personal information and payroll expenses.
It helps ensure that sensitive information is not lost or compromised, reducing the risk of costly data breaches and cybersecurity threats.
Increase the efficiency and accuracy of your payroll
When you automate payroll processes, you can allocate resources more efficiently, saving significant time and cost. By avoiding manual inputs, you also reduce the likelihood of errors.
This technology can give you real-time visibility into your payroll expenses, enabling you to make informed decisions about budgeting and forecasting.
Additionally, it provides enhanced reporting capabilities, allowing you to generate customized reports and analyze your payroll data more effectively.
See also: How to save on your payroll expenses
Onboard (and offboard) more smoothly
Payroll technology automates tasks such as data entry, paperwork, and setting up direct deposits, which reduces the time and effort required for onboarding.
Similarly, when an employee leaves, the offboarding process is automated too. This ensures that all payroll-related tasks — such as final paychecks and tax forms — are dealt with accurately and promptly.
Easily track PTO, attendance, and pay slips
Payroll technology allows you to track and manage employee time off more effectively, which ensures that you are complying with local labor laws.
Additionally, it gives your employees easy access to their pay slips (and other payroll-related information), reducing the need for manual inquiries.
How to set up global payroll
To set up payroll in multiple countries, there are two primary approaches you can take. These are:
Outsource to an established payroll partner
A payroll partner can manage your global payroll through a dedicated solution. In most cases, it eliminates the need to establish a legal entity in all of the countries where you have employees, and is arguably the quickest and easiest way to set up and manage international payroll.
Remote has extensive experience as a payroll provider, and can quickly set up and manage your global payroll.
Set up your own in-house global payroll
You can, of course, manage your global payroll internally, but this requires a significant amount of time, money, and resources. To succeed with this approach, your company would need to be able to:
Establish legal entities in every country where your employees work — a hugely time-consuming and costly process in itself
Ensure that the payroll process is centralized and monitored
Find and retain legal representation in each country
Connect with local benefits administrators
Navigate the unique intricacies of payroll, benefits, and taxes in every country you hire in
For most small and mid-sized businesses, this approach is unrealistic, and a more cost-effective method is required.
See also: Should your small business outsource global payroll?
How to select the right global payroll technology provider
If you do decide to outsource, it’s crucial to select the right global payroll platform. Here are a few key factors to consider when choosing a provider:
Processing capabilities
Your provider should be able to handle all your administrative payroll requirements, while also juggling multiple currencies, tax codes, and employment laws. The payroll process should also be timely, including error correction and data validation.
To learn more about the requirements of global payroll processing — and how a reliable provider can make all the difference — check out our dedicated guide:
Global awareness
Your provider should fully understand the global payroll landscape, including local regulations, compliance requirements, and taxation policies. This knowledge should enable them to manage payroll processes effectively across various countries.
Flexibility and ease of use
Your provider's payroll software should be intuitive, user-friendly, and customizable to your organization's unique needs. If the interface is loud and complex, and requires intensive training to understand, it’s going to drain time and resources.
The software should also integrate seamlessly with other HR and finance systems, including enterprise resource planning (ERP) and specialist accounting software.
Compliance
Your provider should have a robust compliance framework that ensures you are always compliant with local regulations and taxation policies across various countries.
It is also vital for your payroll provider to remain fully current with any changes in compliance requirements, and promptly implement these changes into the platform.
Data security
As payroll data contains sensitive information, your provider must have solid security measures in place to safeguard against potential threats.
Look for providers offering encryption, two-factor authentication, and regular software updates to keep your employee data safe. For instance, Remote provides enterprise-grade employment data protection with built-in payroll security, as well as a dedicated security team, Remote Data Protection Guard, two-factor authentication (2FA), single sign-on (SSO), and more.
Integration capabilities
As mentioned, your payroll platform should be able to integrate with other HR and financial systems, such as accounting software and employee management systems.
Your provider should also provide an application programming interface (API) to integrate your payroll data with other business applications.
Reporting and analytics
To make sound decisions about payroll processes, you need a provider that offers real-time reporting and advanced analytics.
Your provider should also provide customizable reporting to meet the specific needs of your business.
A forward-thinking approach
As with all forms of technology, payroll is constantly evolving. The advancement of innovative technologies like artificial intelligence (AI), machine learning (ML), and blockchain has transformed the function and capabilities of payroll processing.
For instance, AI and ML can analyze large amounts of data quickly and accurately, which is highly useful for complex payroll calculations. They can also help identify data patterns and trends, allowing for more accurate predictions about your future payroll needs.
You can also securely and transparently store (and transfer) sensitive payroll records using blockchain technology. This provides employees with access to their data through a secure digital platform while ensuring its safety.
As a result, you should choose a provider that has integrated (or plans to integrate) these technologies into their platform, and is always looking to understand how new technologies can add value.
How can Remote help?
As you can see, global payroll is a complex process. If you’ve got limited resources, it can be costly, time-consuming, and totally overwhelming.
Outsourcing to third-party providers in the countries you hire in is one solution. However, finding a provider that offers multi-country services can be difficult, meaning you may need to work with partners in multiple countries. This can easily lead to inefficiencies and unnecessary staffing costs, and make it difficult to build trustworthy relationships.
Remote solves this problem by providing one optimized solution for your organization. Specifically, our platform enables you to:
Consolidate payroll processing and minimize administrative tasks
Remote can streamline your payroll processing and minimize administrative tasks for your in-house teams. It is especially useful if you have local entities in multiple countries that lack in-house administration or rely on multiple providers.
Ensure compliance with local labor laws
One of the biggest benefits of using Remote is the assurance that you are complying with local payroll regulations and labor laws — in every country you hire in. As well as giving you peace of mind, it also means that you don’t need to dedicate resources to researching and understanding these laws.
Reduce payroll costs and streamline processes
By centralizing your global payroll administration, you save money on the resources and infrastructure you would otherwise need to support payroll processing in multiple countries.
Remote simplifies your payroll processes, reduces the possibility of errors, and guarantees timely payments, enhancing efficiency across the board.
Make international payments and capital cash transfers
Dealing with global payments across different countries can be daunting and time-intensive.
Similarly, capital cash transfer can be a challenge. You may need to transfer funds between countries to support payroll operations, which involves navigating complex regulatory requirements and foreign exchange processes.
With Remote's integrated solutions — and proven expertise in this area — these obstacles are also removed.
This frees up time and resources for your HR and finance teams, allowing them to focus on other critical areas of operations.
Outsource tax deductions and tax returns
Complying with local tax regulations is a crucial part of global payroll. And if you have employees in multiple countries, tax deductions and returns can take a lot of time, effort, and expertise.
By outsourcing this intense administrative burden to Remote's qualified, knowledgeable experts, you reduce a significant burden on your company.
Setting up global payroll
Global payroll can seem like an impossible task, but with the right technology and support, it doesn’t have to be. With payroll services in countries across the globe, Remote can do all the heavy lifting for you, giving you peace of mind and allowing you to focus your time, money, and resources elsewhere.
To learn more, speak with one of our friendly experts — and discover how exactly Remote can help transform your business.
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