The global employment and payroll platform for small businesses

Small business payroll software allows companies that lack the scale of large corporations to operate payroll for staff across multiple locations. Although many firms still work locally, remote work has enabled organisations of all sizes to hire across regions and countries. Whether a small business runs payroll for a handful of staff or a fully distributed international team, payroll software must adapt to those needs.

Payroll software for a small business may cover core tasks such as paying staff on schedule and in the right amounts. For international teams, the system must ensure payments in the correct currencies and, where required, via approved banks. More comprehensive platforms like Remote also provide services such as benefits administration and globally compliant employee stock option plans.

In most situations, small businesses cannot manage global payroll in-house. To pay team members in other countries legally, small businesses typically have three options: establish an entity in every country where staff reside, engage an employer of record, or hire workers as contractors.

Hiring all workers as contractors can create compliance challenges. Misclassification of international contractors is a serious risk that may expose a small business to thousands in penalties and lengthy legal disputes. Engaging international contractors can be effective, but only when they are genuine contractors and you use an international contractor management platform.

Some small businesses open one or two entities in countries where they have significant headcount and established operations. Few, however, set up entities in every jurisdiction they hire in, given the cost and months-long timelines involved.

Using an employer of record is often the fastest, simplest route for small businesses to run global payroll. An EOR enables legal employment of staff in other countries. A global employment platform such as Remote administers global payroll and taxes, provides benefits to satisfy local obligations, and handles all issues of compliance.

Small businesses outsource HR because it is generally more cost-effective than internalising every HR function. The resources needed to run payroll; manage benefits; withhold taxes; apply required payroll deductions; operate employee stock option plans; and keep pace with changing regulations are typically beyond a small business’s capacity. Even many enterprise organisations outsource HR to specialist providers.

For small businesses hiring across borders, HR challenges multiply. Remote’s guide to international payroll processing outlines common obstacles and offers practical tips to navigate them.

Outsourcing payroll reduces costs for small businesses while helping deliver a reliable employee experience. Even large organisations often encounter payroll and benefits issues when using in-house tools.

In a small business, every employee is vital to the company’s success, so mismanagement of payroll can rapidly damage the employee–employer relationship.

Outsourcing payroll saves small businesses administrative time and greatly reduces payroll errors. Timely, accurate, and consistent pay is a basic expectation in any employment relationship.

For resource-constrained small businesses, achieving 100% error-free payroll in-house is challenging. With an outsourced solution, even the smallest operations can rely on world-class payroll reliability.

Startups face different expectations and challenges compared with small businesses. Startup growth can be sudden and unpredictable, with rapid pivots. Small businesses also experience growth, but changes for more established firms are usually less volatile.

Both startups and small businesses require payroll solutions that are reliable and flexible. Small businesses usually lack the investor backing available to many startups, so costs must be covered by product and service revenue rather than investor funding. As a result, small businesses should take care to avoid payroll vendors with hidden fees or other unpredictable charges.

It’s important for small businesses to ask the right questions about payroll at the start of any new relationship with a payroll services provider.

Costs for small business payroll services vary by employee locations, overall payroll size, and the benefits offered. Generally, however, simple payroll for local teams need not be expensive.

Small businesses with distributed teams across multiple countries will incur higher payroll expenses, but those costs often include benefits administration, foreign tax withholding, and compliance with local employment regulations.

If hiring the right candidate outweighs continuing to search locally, onboarding an employee in another country can create long-term savings. For details on costs for small business payroll across countries, see Remote’s pricing page.

EOR services were once the preserve of cash-rich enterprises, but that has changed. The expansion of remote work has lowered EOR costs broadly, allowing small businesses to access international talent without excessive fees or salary mark-ups.

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

• Does the EOR operate owned entities in every country, or does it subcontract 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 your employees’ sensitive personal data?

• If you run an employee stock purchase plan, can the EOR administer that plan for you, including 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?