The global employment and payroll platform for small businesses

Small business payroll software enables businesses lacking the resources of large corporations to run payroll for team members in several locations. Although many companies still operate locally, the growth of remote work means organisations of every size can employ people in multiple locations, including abroad. Whether a small business must process payroll for a handful of staff or for a fully distributed international team, payroll software should adapt to the firm's requirements.

Payroll software for a small business may cover the essentials, such as paying team members on time and in the correct amounts. For international teams, it also ensures team members are paid in the appropriate currencies and, where necessary, through approved banks. More comprehensive payroll platforms such as Remote include extra services, like benefits administration and globally compliant employee stock option plans.

In most cases, small businesses cannot operate 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 engage all workers as contractors, that approach can create complex compliance issues. Misclassifying international contractors is a serious matter that could cost a small business thousands of dollars, not to mention time spent contesting cases in distant courts. Hiring international contractors can be a sensible move, but only when dealing with legitimate contractors and when using an international contractor management platform.

Small businesses sometimes open one or two entities in countries where they have many employees and an established business base. However, few small businesses choose to open entities everywhere they hire, because doing so can be costly and may take months to complete.

An employer of record is the quickest and simplest way for small businesses to run payroll for global teams. An EOR enables 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 this is typically more cost effective than bringing every HR function in-house. The resources needed to run payroll; manage benefits; withhold taxes; make required payroll deductions; administer employee stock option plans; and keep up with changing regulations are simply too great for most small firms. Even many large organisations outsource HR to specialised providers.

For small businesses hiring across borders, HR management challenges multiply. Remote’s guide to international payroll processing sets out common problems small businesses face and offers practical tips on how to navigate them.

Outsourcing payroll saves small businesses money while helping them deliver a consistently good experience for employees. Even in large organisations, payroll and benefits management can be problematic with in-house tools.

In a small business, every employee plays a critical role in the company’s success, so mismanagement of payroll can quickly damage the employee–employer relationship.

Outsourcing payroll lets small businesses save time on administrative tasks while eliminating or greatly reducing payroll errors. Employees need on-time, accurate and consistent pay as a basic condition of employment.

For a small business with limited resources, achieving 100% error-free payroll with an in-house solution is difficult. With an outsourced payroll provider, even the smallest operations can benefit from world-class reliability.

Startups face different expectations and challenges compared with small businesses. Growth for startups can be sudden and unpredictable, with rapid pivots and changes. Small businesses also grow, but for more established firms those changes tend to be less chaotic.

Both startups and small businesses need reliability and flexibility from their payroll services. Small businesses often lack the investor backing of startups, so their costs typically must be covered by sales revenue rather than investor cash. For that reason, small businesses should be particularly wary of 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.

Small business payroll service costs vary depending on where employees live, the total company payroll and which benefits the business chooses to offer. Generally, however, small businesses do not need to pay high prices for basic payroll services, particularly for local teams.

Small businesses with remote teams across several countries do spend more on payroll, but those costs also cover benefits administration, foreign tax withholding and compliance with local employment rules.

When the choice is between hiring the right person for a role or continuing to search locally, onboarding an employee in another country can produce significant savings over time. For more information on costs for small business payroll across multiple countries, see Remote’s pricing page.

Where EORs were once services for large enterprises with deep pockets, that is no longer the case. The rise of remote work has driven down EOR prices, enabling small businesses to access international talent without paying excessive fees or salary percentages.

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

• Is this an owned-entity EOR in every country, or does this EOR outsource its services to third parties in certain countries?

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

• How securely does the EOR handle your employees’ sensitive personal information?

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

• Will you need separate platforms for contractors and employees?

• Are there any hidden fees that vary from one country to another?

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