International payroll processing: providers, models and best practice

Discover how to administer international payroll for your worldwide team with guidance from Remote’s global employment specialists.

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Payroll processing is strategically important

These days, organisations of any size can readily hire talent worldwide. Ensuring accurate and compliant payment, however, is a separate challenge.

Beyond making sure staff are paid on time, you must navigate numerous local compliance and tax requirements that accompany international hiring. With employees in multiple jurisdictions, this can quickly become overwhelming.

That is why choosing the correct solution is crucial. Your global payroll platform should be more than an administrative utility; it should be a strategic asset enabling you to recruit and remunerate top talent worldwide while minimising the risk of non-compliance.

What you will learn

This guide will help you determine the most suitable kind of global payroll provider for your organisation. It also examines recommended approaches to international payroll processing and addresses common questions from those overseeing payroll.

What counts as international payroll?

Partner-dependent or an owned entity?

Best practice for international payroll

Frequently asked questions

What does international payroll processing involve?

How to pay your international employees

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Global payroll

Paying international employees

Payroll broadly refers to the processes involved in paying your staff. These include:

  • Salary calculation

  • Benefits administration

  • Tax deductions and withholding

  • Overtime

  • Record-keeping

  • Payroll tax forms

  • Compliance with all relevant tax and labour laws

When you employ — and pay — staff across different countries, this constitutes global payroll.

Naturally, for multinational organisations (or those planning to expand) these processes rapidly grow more complex, particularly regarding compliance and taxation.

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Global payroll

Managing global payroll: an expert guide

Key considerations for international payroll processing

Here we examine several of these processes in more detail. If you intend to extend recruitment across borders, you should take the following into account:

  • Labour and employment laws differ between countries (and occasionally by state or province as well). You must ensure that you understand what each jurisdiction requires regarding minimum wage, paid and unpaid leave, overtime, and break entitlements.

  • Tax laws also vary by jurisdiction, with differing rates, obligations, reporting requirements and deadlines.

  • Salaries and wages must be calculated accurately and on time. In certain countries, for example the US, you also need to consider distinctions between salaried and hourly employees.

  • Employee benefits should be assessed, recorded and made compliant with local regulations. In some jurisdictions particular benefits are mandatory, while in others they are not. These may include health and dental insurance, life cover, pension arrangements, and protected PTO.

  • Methods and timelines of payment can vary by country. In some jurisdictions employees must be paid at least monthly, while in others payments are made fortnightly. This may also depend on factors such as the employee’s role.

Managing all these payroll tasks effectively requires time, resources, and local expertise. For many firms — particularly smaller ones — that is not a realistic prospect.

Consequently, more businesses are outsourcing payroll; 64% of firms do so, according to a 2021 study by EY.

For international businesses, what does this mean in practice? How is it implemented? And which type of solution is appropriate?

Global payroll providers typically offer three core services:

1. Global employment services

If you do not have a legal entity in an employee’s country, you will need to hire, manage, and pay them through an employer of record (EOR) — such as the service provided by Remote. EORs act as the legal employer, allowing you to engage workers in a country quickly, efficiently, and in compliance with local law. This approach suits organisations seeking rapid, flexible expansion. Under Remote’s EOR offering, Remote administers payroll, benefits (including equity incentives), and day-to-day HR, ensuring full compliance with applicable regulations. This lets you concentrate on recruiting the right people and running your business.

2. Localised payroll services

If you do own a legal entity in the employee’s country, you can either run payroll internally or outsource. Remote offers localised payroll services via our Global Payroll platform. This choice suits companies that have already invested significantly in a country and plan to sustain a sizable local workforce. With this model you remain the legal employer but Remote (or your chosen provider) conducts the payroll; you remain responsible for complying with local legal requirements.

3. Contractor management services

When paying independent contractors the situation differs. Many firms opt to engage international workers as contractors for simplicity. But if you do so, take care to avoid misclassification — when a contractor is treated like an employee without receiving the associated benefits or protections. Misclassification can lead to legal action, substantial fines and reputational damage. Because countries vary in how they define employees, your global payroll solution is a primary safeguard. Remote can help you prevent misclassification, convert contractors into employees where necessary, and manage genuine contractors easily.

Partner-dependent or owned entity?


Global payroll providers generally fall into two categories: partner-dependent international payroll services, or owned‑entity global payroll services — such as Remote.

Both models typically supply the three services outlined above (global employment, localised payroll processing, and contractor management), and can administer payroll across multiple countries.

Which option should you choose?

Partner-dependent payroll providers

Partner-dependent providers outsource services to — and rely on — third parties within the countries where they operate.

This approach commonly has several drawbacks, such as:

  • Higher costs

  • Hidden fees

  • Longer waiting times

  • Involvement of unfamiliar third parties

  • Generally poorer experience for employees

  • Limited IP protections

Using a partner-dependent service can work short term, but if you intend to scale, it is generally advisable to avoid this route.

Owned-entity payroll providers

Owned-entity providers deliver payroll, benefits, HR and compliance services directly. They operate their own entities in the countries they cover, so outsourcing is unnecessary.

Remote is an owned-entity solution. As such, we provide a highly positive experience for both employers and employees, with no hidden costs, robust security, and strong IP protections.

International payroll processing: best practice

After you have selected a type of global payroll provider, bear the following points in mind:

Choose your global payroll partner carefully

Select an international payroll partner that comprehends your requirements and, crucially, can support them at scale. You do not want to switch providers as you expand or to postpone hiring because your provider cannot execute the necessary tasks.

In particular, your chosen partner should:

  • Have local, on-the-ground experts in every country in which it operates

  • Fully understand and monitor changes to local employment and tax laws

  • Own its own entities

  • Be transparent about all fees and payments

  • Provide the highest standards of security and data protection

If you intend to use global employment services, it is also recommended to choose a provider that:

Remote meets all of these criteria. To find out how we can meet your global payroll and HR requirements, speak to one of our friendly experts today.

“If it's down to me to understand local taxes and compliance or anything country-specific, something will probably be missed and problems can follow. But Remote covers everything. They carry out payroll and tax correctly, and handle everything else as well. That peace of mind is the most important thing for me.”

Stefan Kende, COO at Swell

Prioritise the employee experience

When evaluating potential payroll partners — and afterwards — keep your team foremost. Do not simply choose the cheapest provider; consider how it will affect your employees' day-to-day experience.

Employee peace of mind is not the only consideration. If they have a poor experience or your payroll provider becomes prone to late or incorrect payments, staff will become frustrated and disengaged — and may begin seeking opportunities elsewhere.

Give careful thought to benefits as well. Collaborate with your provider to identify and offer benefits that matter to your team, and make sure they understand and value the responsibilities associated with being your company's payroll contact.

Avoid misclassification risk

As noted, it is essential to clarify the employment relationship between your organisation and staff in each country.

If you set a worker's hours, pay, role and responsibilities, and usually supply the necessary tools and equipment, they will generally be classed as an employee.

If, by contrast, the worker sets their own schedule, supplies their own tools and does not work exclusively for your organisation, they should be classed as an independent contractor. Contractors frequently (though not always) work on defined projects.

Understanding this distinction is important. In most jurisdictions employees are entitled to statutory benefits and protections, whereas independent contractors typically are not. You are generally responsible for deducting tax from employees, while contractors are responsible for filing and paying their own taxes. This significantly affects payroll planning and processing.

Penalties for misclassification can be severe. In addition to substantial fines, backdated taxes and benefits, and legal costs, you may be prohibited from engaging contractors in a particular country and could even face criminal prosecution.

Remote assists in correctly classifying your workers and avoiding such outcomes. We can also convert contractors into employees easily if required.

“A common misconception is that hiring internationally based employees or contractors is difficult or impossible. Remote simplifies both, allowing companies to engage contractors and employees for various purposes and be confident that individuals are classified correctly.”

Sam Ross, CLO at Remote

Think carefully about your goals

If you are considering opening a legal entity in another country, that can be appropriate. Bear in mind that using a global employment partner can help you achieve the same short‑ and medium‑term growth objectives while also providing a scalable foundation for long‑term plans.

Also consider that launching a new legal entity abroad can be costly. The time, complexity and strain on internal resources make this impractical for many businesses — particularly smaller ones. Partnering with an EOR is often a quicker, more cost‑effective solution, eliminating the need to recruit costly in‑house specialists.

"If we coordinated everything in-house, I would need to employ four additional people to manage entities, local solicitors, tax firms, accountants, payroll, and translation services; it would cost upwards of $500,000 extra per year. Remote removes that burden from us."

Luke McKinlay, VP of Finance at Fountain

Ultimately it depends on your objectives, budget and preferences. If you are unsure which approach suits your organisation best, we can present the options and help you choose. Whether you intend to operate through your own entity or use an EOR, we can provide a flexible, scalable, and secure payroll solution.

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Country-specific global payroll information

These are some of our most viewed countries. Visit our Country Explorer to learn more about global payroll in specific countries.

International payroll processing FAQs

Want to learn more about managing international payroll? Below are some frequently asked questions:

International team members are typically paid in the same manner as domestic staff: directly into their personal bank accounts. As with domestic employees, you must first calculate and deduct any applicable taxes, contributions and benefits (see below).

If you operate your own legal entity, you will be responsible for making these payments yourself, usually from your business bank account in that country. If you use a payroll provider (either a global employment partner or a localised payroll partner), you typically submit the payroll funds and the provider distributes them.

Note that for contractors the method and currency of payment should be set out in your contractor agreement. Some contractors may insist on being paid via particular channels, which may not suit you (and vice versa), and there may be limits on which currencies you may use. Remote’s Contractor Management platform enables you to manage and pay contractor invoices quickly and easily in multiple currencies, and through multiple methods.