Global Payroll Challenges and How to Master Them

March 21, 2019 | Yana Todorova 5 mins read

Nowadays, not only are large organisations going global the small and mid-sized companies are too. Maintaining compliance when you go global can be difficult if your processes are not set up correctly.

Deciding to adopt a global payroll system is a cost-effective and efficient change for the company. However, becoming a global business presents both opportunities and challenges.

Here we discuss some of the challenges that Multinationals face when implementing global payroll and how to overcome them.


Achieving global compliance

Concerns over compliance, taxes, penalties and fines have traditionally been the main inhibitors preventing firms from moving to a global operation. Ensuring compliance can be difficult when you have employees in multiple countries. Every country has different rules and regulations, and require different types of information to be submitted, in different formats, and at different deadlines. Keeping track of all these can be time consuming and in some cases require additional resources. But it doesn’t have to be hard, implementing digital technology to solve these problems, so the business can scale and not the man hours.

A global payroll software can help you coordinate payroll internationally, ensuring that your company is compliant.


Global business vs. local payroll

Payroll is regulated locally and every country, state and even municipality will have their own guidelines that must be met. Local experts can provide specialised local knowledge. Your payroll process will also need to accommodate local laws, reporting requirements, taxes, currency, and language. It can be very difficult to get “local”, especially when your organisation is headquartered in another country.

Political changes can create unforeseen challenges. For example, the United Kingdom still negotiating its exit from the European Union and the uncertainties surrounding Brexit may bring other payroll implications.


Technology and Integration

Integrating your global payroll into your Human Resource Information System (HRIS) or Human Capital Management System (HCM) can be really complex. Integration between technology systems can be challenging enough, but becomes even trickier when payroll solutions use different currencies and languages and require different compliance reporting.

A global payroll management software is a way to bridge the gap between international payroll and your HRIS in order to get a holistic view over HR and Payroll.


Getting accurate, real-time reporting

Just as local legislations vary across countries so do systems, processes and reporting when working with local payroll providers/in country partners (ICP’S). With a single system which integrates with the ICP’s, the organization can retrieve crucial data quicker and with significantly less human involvement. The single source and format of the data will help businesses get a global understanding of their payroll and employment tax obligations.

Introducing a global payroll software will provide visibility over global payroll by producing comprehensive customised payroll reports. Providing the ability to connect centralised and localised payroll teams on one unified system across all providers, countries and people.


Cost and execution

Implementing global payroll doesn’t come free and it’s impossible to make changes overnight. A major change to the company’s structure is needed, which means it can be difficult to get internal stakeholders support.

This process is difficult to implement, however done right, global payroll almost always saves you money in the long run.

Using one centralised cloud platform can reduce costs significantly.


Security and data privacy

Data protection is a critical issue as payroll databases contain employees’ personal information. The idea of moving to a global system can be met with internal objection, however logically, the smaller number of people with access to the data leads to increased data security. If implemented correctly, your employees’ information will be in less hands and stored with better technology, keeping it safer than ever before.

Implementing a Global Payroll Management software will help you catalog your employees’ personal data, simplify how you manage and monitor the personal data of your global workforce and give you tools and resources you need to help you meet the General Data Protection Regulations (GDPR).

The move to global payroll is not without its challenges, but the rewards far outweigh the risks.

If you have more questions about adapting to a global payroll system and for further information on Payslip’s international payroll services contact us today!

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Using Payslip, we can manage all our payrolls across nine in-country vendors on one platform. When the global Covid-19 pandemic arose, it was not an issue from a payroll perspective, and critically getting everyone paid. The Payslip platform enabled continuity for our international payroll service including the fast and seamless implementation of the Payslip Employment Self Service during this time.

Colin Smith

Payroll Manager, LogMeIn

With business and employee growth rates of above 50%, we rely on our vendors to deliver on time, every time. Payslip’s workflow automation, enables Phorest to manage our payroll provider process – data driven, real time and transparent. Payslip saves us time so we can focus on our business growth.

Ana Kelly

International Payroll Manager, Phorest

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