
International payroll processing: providers, models and best practice
Find out how to manage international payroll for your distributed workforce with guidance from Remote’s global employment specialists.
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Payroll processing is strategically essential
Organisations of every size can now hire talent worldwide, but ensuring payments are accurate and compliant presents a separate challenge.
Beyond making sure people are paid on time, you must navigate numerous local compliance and tax rules that come with international hires. If your team is spread across several jurisdictions, it can quickly become overwhelming.
That’s why choosing the right solution matters. Your global payroll platform shouldn’t be just an admin tool — it should be a strategic asset that helps you hire and pay top talent worldwide while minimising compliance risk.
What you'll learn
This guide explains how to choose the most suitable global payroll provider for your business, outlines best practices for running international payroll, and answers frequent questions from payroll leaders.
What is international payroll?
Partner-dependent or owned entity?
Best practices for international payroll
What is international payroll processing?
How to pay your global employees

How to pay international employees
Payroll covers the set of activities involved in paying staff. These typically include:
Salary calculation
Benefits administration
Tax deductions and withholding
Overtime
Record-keeping
Payroll tax forms
Compliance with relevant tax and labour laws
When you employ — and pay — people in multiple countries, that’s global payroll.
Naturally, for organisations operating internationally these tasks become more complicated — particularly around tax and compliance.

Managing global payroll: the expert guide
Key considerations for international payroll processing
Here are some of those processes in more detail. If you plan to hire across borders, consider the following:
Labour and employment laws vary by country (and sometimes by state or province). You must understand what each jurisdiction requires regarding minimum wage, paid and unpaid leave, overtime and break entitlements.
Tax laws also differ across jurisdictions, with unique rates, reporting duties and filing timelines.
Salaries and wages must be calculated accurately and on time. In some countries — such as the US — you also need to account for differences between salaried and hourly staff.
Employee benefits need to be calculated, tracked and compliant with local rules. In some places certain benefits are legally required; in others they’re optional. These can include health and dental cover, life insurance, retirement arrangements and protected paid time off.
Methods and timelines of payment can vary by country. Some jurisdictions require monthly pay, others fortnightly, and this can also depend on the employee’s role.
Managing all of these payroll tasks requires time, money and local know-how — resources many businesses, especially smaller ones, don’t have.
Because of that, outsourcing payroll is increasingly common — 64% of companies do so according to a 2021 study by EY.
What does outsourcing payroll look like for international companies? How does it operate, and which type of solution suits your needs?
Here are the three core services global payroll providers usually offer:
1. Global employment services
If you do not have a legal entity in an employee’s country, you’ll need an employer of record (EOR) — such as Remote — to hire, manage and pay them. EORs act as the legal employer so you can onboard staff quickly, compliantly and at scale. Our EOR service handles payroll, benefits (including equity), and day-to-day HR, ensuring compliance so you can concentrate on hiring and growing your business.
2. Localised payroll services
If you have a legal entity in your employee’s country, you can run payroll internally or outsource it. Remote offers localised payroll via our Global Payroll platform. That route suits organisations that have already invested significantly in a country and plan to keep a substantial in-country team. Under this model you remain the legal employer while Remote (or your chosen provider) administers payroll. You retain responsibility for legal compliance.
3. Contractor management services
Paying contractors is different to paying employees, and many firms default to hiring internationals as contractors because it’s simpler. Be cautious of misclassification — treating someone as a contractor when they meet the criteria of an employee can bring fines and reputational harm. Because rules differ across countries, your global payroll solution is your first line of defence. Remote helps you avoid misclassification, convert contractors to employees when needed, and manage genuine contractors efficiently.
Partner-dependent or owned entity?
Global payroll providers typically fall into two categories: partner-dependent services, or owned-entity providers such as Remote.
Both models generally deliver the three services above (global employment, localised payroll and contractor management) and can operate across many countries.
Which should you choose?
Partner-dependent payroll providers
Partner-dependent providers outsource their services to third parties in the countries they serve and rely on those partners to deliver.
There are often several drawbacks to this model, such as:
Higher costs
Hidden fees
Longer waiting times
Involvement of third parties you may not fully know
Generally poorer employee experience
Limited IP protection
A partner-dependent model can be fine short term, but if you plan to scale it’s usually better to avoid it.
Owned-entity payroll providers
Owned-entity providers offer payroll, benefits, HR and compliance services directly. They operate their own entities in the countries they cover and don’t need to outsource.
Remote is an owned-entity provider. Because of that, we deliver a significantly better experience for employers and employees, with no hidden charges, robust security, and strong IP protections.
International payroll processing: best practices
Once you’ve chosen the right type of provider, keep these points front of mind:
Choose your global payroll partner carefully
Pick an international payroll partner that gets your needs and can support them as you grow. You don’t want to switch providers mid-growth or delay hiring because your supplier can’t keep up.
Specifically, your chosen partner should:
Have local, on-the-ground experts in every country it operates in
Closely monitor and fully understand changes to local employment and tax laws
Own its own entities
Be transparent about all fees and charges
Offer top-tier security and data protection
If you choose global employment services, it’s also wise to work with a provider that:
Complies fully with labour and tax laws in every country it operates in
Allows you to select and offer statutory and supplementary benefits, including health insurance, retirement plans and equity incentives
Integrates HR processes into a single platform, including HRIS
Provides prompt, practical support when you need it
Remote meets these criteria. To find out how we can support your global payroll and HR needs, speak to one of our friendly experts today.
“If it were my responsibility to understand local taxes and compliance or any country-specific matters, something would probably slip through and issues could arise. But Remote handles it all — the payroll, taxes and everything else. That peace of mind matters most to me."
Stefan Kende, COO at Swell
Prioritise the employee experience
When assessing payroll partners — and after you’ve chosen one — keep your people front of mind. Don’t pick the cheapest option without considering how it will affect employees’ daily experience.
It’s not only about staff wellbeing. If payroll runs late or is inaccurate, employees will become frustrated and disengaged — and may start looking elsewhere.
Give careful thought to benefits. Work with your provider to identify perks that matter to your people and make sure your team understands the obligations associated with payroll.
Avoid misclassification risk
As noted, it’s vital to define the employment relationship with each team member in every country you hire in.
If you set a person’s hours, pay, duties and provide tools and equipment, they will generally be considered an employee.
If a person sets their own hours, supplies their own tools and doesn’t work solely for you, they are more likely to be an independent contractor, often engaged for specific projects.
This distinction matters. In most places employees receive statutory protections and benefits that independent contractors do not. Employers normally withhold tax for employees, whereas contractors usually handle their own taxes. That difference has big implications for payroll design and execution.
Misclassification penalties can be severe. Beyond heavy fines and backdated taxes and entitlements, you may face legal costs, bans on engaging contractors in certain countries, and potentially criminal charges.
Remote helps make sure you classify team members correctly and avoid misclassification. We can also convert your contractors into employees if required.
“A common misconception is that hiring an internationally based employee or contractor is difficult or impossible. Remote makes both straightforward, so companies can work with contractors and employees and have confidence that classifications are correct.”
Sam Ross, CLO at Remote
Think closely about your goals
If you plan to establish a legal entity abroad, that’s a valid path. Bear in mind, though, that working with a global employment partner can achieve the same short‑ and medium‑term growth aims and also set a scalable base for long‑term expansion.
Bear in mind that setting up a new entity overseas can be costly. The time, complexity and demand on internal resources makes it impractical for many organisations — especially smaller ones. Working with an EOR can be quicker and more cost-effective, removing the need for expensive in-house specialists.
"If we coordinated everything in-house, I’d need to hire four extra people to manage entities, local solicitors, tax firms, accountants, payroll, and translation services; it would cost upwards of $500,000 extra per year. Remote takes that burden off of our plate."
Luke McKinlay, VP of Finance at Fountain
Ultimately, the right approach depends on your objectives, budget and preferences. If you’re unsure, we can outline your options and recommend the best fit. Whether you want to operate your own entity or use an EOR, we offer flexible, scalable and secure payroll solutions.
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Additional payroll management research
The easy, compliant way to manage global payroll processing
If you’re planning to grow your workforce, a dependable international payroll solution can make a real difference.
No matter the size of your business or your expansion plans, Remote helps you navigate the evolving complexities of global payroll. Our all‑in‑one platform calculates and runs payroll accurately, compliantly and quickly, saving time and taking a major administrative load off your team.
To find out more about how we can simplify global payroll, schedule a call with one of our experts — or book a demo today.
Global payroll information by country
These are some of our most-visited country pages. Visit our Country Explorer to read more about payroll in specific countries.
International payroll processing FAQs
Want to learn more about international payroll management? Below are some frequently asked questions:
Your international team members are usually paid the same way as domestic staff: directly into their personal bank account. As with local employees, you must first calculate and withhold any applicable taxes, contributions and benefits (see below).
If you have a local entity, you’ll typically pay from your business bank account in that country. If you use a payroll provider — whether a global employment partner or a local payroll supplier — you usually transfer payroll funds to the provider and they distribute payments on your behalf.
Note that, for contractors, the method and currency of payment should be established in your contractor agreement. Some contractors may insist on being paid through a certain channel, which you may not be comfortable with (and vice versa), and there may be restrictions on which currencies you are allowed to pay in. Remote’s Contractor Management platform allows you to manage and pay contractor invoices quickly and easily in multiple currencies, and through multiple methods.
In general, payroll calculation involves allocating salaries, withholding, and benefits. With global payroll, employers must do this while also complying with the tax, employment, and labor laws of every country where they have employees.
Unsurprisingly, this can be a complex process. To ensure you are calculating your payroll correctly and compliantly, you can either hire internal specialists for each country, outsource to local third parties — or use a centralized global payroll platform, like Remote.
The amount you pay your international employees depends on your company’s budget and model. Some companies opt to pay a single rate regardless of location, while others base salaries on geo ranges, local market rates, and costs of living.
For example, imagine you’re advertising for a role that, in London, would pay £80,000 per year. Some companies may use that as a baseline and offer it to the successful candidate, no matter where in the world they live.
Alternatively, other companies may adjust that £80,000 to reflect the candidate’s local market, taking geo ranges, local expectations, and local pay scales into account.
Which approach you choose is up to you. To keep offers competitive, research local markets and consider the benefits you’ll need to provide. Remote can help you understand local salary ranges and design competitive benefits packages for each market.
“One thing I didn’t expect but really valued was Remote's benefits offering. It helped us work out what someone in California would expect and what it would cost. In the end we were able to make a very professional offer to our prospective employee, whereas without Remote we'd have no idea what was expected or appropriate.”
Ed Nutter, CEO of Midspace (formerly Clowdr)
When it comes to compliance, taxes, and employment, are your international employees governed by the laws of their country — or the laws of yours?
In general, your company should fully comply with the laws of the country where your business is headquartered.
However, when hiring abroad you must also follow the laws of the countries where your employees work. For example, if you’re based in Australia and hire someone in Germany, you must provide the relevant leave, make employer contributions (such as social security) and meet German employment conditions.
You may also have extra obligations depending on your home country. For instance, US companies hiring overseas contractors may need to submit forms such as W‑8 BEN to the IRS.
Remote can explain your compliance obligations in different countries and help ensure you meet them.
“With employment laws and regulations varying from country to country, we don’t have time to go through the bureaucratic and time-consuming process of setting up a new legal entity every time we make a new hire. Remote allows us to effortlessly onboard new employees, safe in the knowledge that we are fully compliant. We are free to select the best candidates available, enabling us to focus on growing our business.”
Andy Firth, Finance and Operations at Nearcut
Generally, US-based companies cannot legally make direct payments to overseas employees (note that this is not the case for independent contractors).
As mentioned, you’ll need to pay international employees via your own legal entities in those countries, or via a global payroll provider.
If your business is based in the US and you want to understand what your options are, our friendly experts can explain everything in detail.




