The global employment and payroll platform for small businesses

Small business payroll software allows businesses without the resources of corporate giants to run payroll for team members in multiple locations. While many businesses may operate entirely locally, the rise of remote work now allows companies of all sizes to work with team members in multiple locations, including other countries. Whether a small business needs to run payroll for just a few team members or for an entire team distributed across international borders, payroll software needs to be able to adapt to that company’s needs.

Payroll software for a small business might include just the basics, like making payments to team members on time and in the correct amounts. For international teams, payroll software also ensures team members are paid in the correct currencies and, when applicable, through approved banks. More robust payroll software platforms like Remote include additional services, like benefits administration and globally compliant employee stock option plans.

In most cases, small businesses cannot run their own payroll in-house for global teams. To pay team members in other countries legally, small businesses have three options: open an entity in each country where employees live, work with an employer of record, or hire workers as contractors.

While some businesses choose to hire all workers as contractors, doing so can create tricky problems related to compliance. Misclassifying international contractors is a serious issue that could cost a small business thousands of dollars, not to mention time spent arguing in distant courts. Hiring international contractors can be a great move, but only when dealing with legitimate contractors and when using an international contractor management platform.

Small businesses sometimes choose to open one or two entities in countries where they have lots of employees and a strong foundation for business. However, few small businesses choose to open entities everywhere they hire, as doing so can be costly and take months to complete.

An employer of record is the fastest and easiest way for small businesses to run payroll for global teams. An EOR allows a small business to hire employees legally in other countries. A global employment platform like Remote manages global payroll and taxes, administers benefits to meet local employment obligations, and handles all issues of compliance.

Small businesses outsource HR services because doing so is usually more cost effective than bringing every HR function in house. The resources required to run payroll; manage benefits; withhold taxes; make required payroll deductions; run employee stock option plans; and stay compliant with evolving regulations is simply too much for a small business to handle. Even most enterprise organisations outsource their HR services to providers who specialise in these areas.

For small businesses hiring internationally, the challenges of HR management only increase. Remote’s guide to international payroll processing outlines several of the challenges small businesses face while providing helpful tips on how to navigate these obstacles.

Outsourcing payroll saves small businesses money while ensuring they provide a great experience for their employees. Even in large organisations, issues with payroll and benefits management are common with in-house tools.

In a small businesses, every employee plays a critical role in the company’s success, so mismanagement of payroll can quickly lead to a rocky employee-employer relationship.

Outsourcing payroll allows small businesses to save time on administrative processes while eliminating or greatly reducing payroll errors. Employees require on-time, accurate, and consistent payroll as a basic condition of any working relationship.

For a small business with limited resources, meeting the standard of 100% error-free payroll with an in-house tool or solution is difficult. With an outsourced payroll solution, however, even the smallest operations can enjoy world-class reliability in payroll.

Startups face different expectations and challenges compared with small businesses. Their growth phases can be abrupt and unpredictable, with rapid pivots and changes. While small businesses also grow, more established firms usually encounter less turbulent change.

Both startups and small businesses require payroll services that offer reliability and flexibility. Small businesses often lack the investor backing startups have, so their costs must usually be covered by sales rather than investor capital. Consequently, small businesses should be vigilant against payroll vendors with hidden fees or other unforeseen charges.

It's essential for small businesses to ask the right questions about payroll when starting any new relationship with a payroll services provider.

Small business payroll costs vary depending on employees' locations, total company payroll and which benefits the business offers. Generally, small businesses need not pay high prices for basic payroll services, particularly for local teams.

Small businesses with remote teams across several countries do pay more for payroll, but those costs often include benefits administration, foreign tax withholding and compliance with local employment rules.

When choosing between hiring the right candidate for a role and spending longer to find someone locally, bringing on an employee in another country can result in substantial savings over time. For further details on costs for small business payroll across multiple countries, see Remote’s pricing page.

Employers of record (EORs) were once services mainly for large, well-funded enterprises, but that is no longer true. The growth of remote work has reduced EOR costs broadly, enabling small businesses to access international talent without hefty fees or large salary mark-ups.

Any small business looking to use an EOR to onboard international talent should ask the following questions of any prospective EOR provider:

• Does the EOR operate as an owned-entity in every country, or does it delegate services to third parties in some jurisdictions?

• What protections does the EOR offer for intellectual property and invention rights?

• How securely does the EOR manage sensitive personal data belonging to your employees?

• If you provide an employee stock purchase plan, can the EOR administer it for you, including handling tax withholding?

• Will you require separate platforms for contractors and employees?

• Are there hidden fees that vary between countries?

• Does the EOR offer special discounts for startups or social purpose organisations?