The global employment and payroll platform for small businesses

Small business payroll software permits businesses without the scale of large corporations to run payroll for team members across multiple locations. Although many businesses may operate locally, the increase in remote work now allows firms of any size to work with team members in different locations, including overseas. Whether a small business needs to run payroll for a handful of team members or for a fully distributed team, payroll software must be flexible enough to meet those needs.

Payroll software for a small business often covers the basics, such as paying team members on time and in the correct amounts. For international teams, it also ensures people are paid in the right currencies and, where required, through approved banks. More comprehensive payroll platforms like Remote include additional services, such as benefits administration and globally compliant employee stock option plans.

In most cases, small businesses cannot manage global payroll in-house. To pay team members in other countries legally, small businesses have three options: establish an entity in each country where employees are based, work with an employer of record, or hire workers as contractors.

While some businesses choose to engage all workers as contractors, this can create complex compliance issues. Misclassifying international contractors is a serious risk that could cost a small business thousands of dollars and considerable time in remote courts. Hiring international contractors can work well, but only when they are genuine contractors and when using an international contractor management platform.

Some small businesses open one or two entities in countries where they have a concentrated employee base and a solid business footing. Few establish entities in every country they hire in, since doing so is costly and can take months to complete.

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

Small businesses outsource HR services because it is generally more cost-effective than bringing every HR function in-house. The resources required to run payroll; manage benefits; withhold taxes; make required payroll deductions; operate employee stock option plans; and remain compliant with changing regulations are typically too great for a small business. Even many large organisations outsource HR to specialist providers.

For small businesses hiring internationally, HR challenges increase. Remote’s guide to international payroll processing outlines several of the challenges small businesses face and offers practical tips to navigate these obstacles.

Outsourcing payroll reduces costs for small businesses while ensuring a reliable employee experience. Even large organisations often experience issues with payroll and benefits management when relying on in-house tools.

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

Outsourcing payroll saves time on administrative tasks while eliminating or greatly reducing payroll errors. Employees expect on-time, accurate, and consistent pay as a basic condition of employment.

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

Startups face different expectations and challenges compared with small businesses. Growth phases for startups can be sudden and unpredictable, with rapid pivots. Small businesses also experience growth, but for more established companies these 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 common to startups, which means costs must generally be covered by product and service revenues rather than investor capital. Because of this, small businesses should be particularly cautious of payroll vendors with hidden fees or 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 company’s total payroll, and which benefits are offered. Generally, small businesses do not need to pay high prices for straightforward payroll services, especially for local teams.

Small businesses with remote teams spread across multiple countries typically spend more on payroll, but those costs usually include benefits administration, foreign tax withholding, and compliance with local employment regulations.

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

EORs were once services reserved for well-funded enterprises, but that is no longer the case. The rise of remote work has lowered EOR costs across the market, enabling small businesses to access international talent without paying steep fees or large 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 kind of protections does the EOR provide for intellectual property and invention rights?

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

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

• Do you need multiple platforms for contractors and employees?

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

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