Payroll is one of the most critical functions in every organization. When it comes to payroll, there is no room for error. Payroll must always be completed accurately and on time.
Recently, technology has revolutionized the business environment. The world has turned into a small village where hiring international workers is now quick and easy.
However, companies realize that adhering to local laws and legislation gets harder, more expensive, and more time-consuming as they enter new international markets.
That is why many of them are turning to global payroll providers to comply with local regulations. But how to choose the right global payroll provider? What are the top considerations before making a decision? These are the questions we answer in this article.
What are Global Payroll Outsourcing Services ?
Global payroll outsourcing services manage payment for your employees globally.
Global payroll services are not only about the payroll calculation; it goes beyond that. It can also include benefits administration, tax filing, compliance, and many other tasks.
A reliable global provider offers country-specific knowledge to help you hire like a local & manage employees and contractor payments globally.
Working with a global service provider gives you peace of mind knowing that you have the right tools to accurately pay your employees and taxes on time.
On the legal side, a global payroll service provider helps organizations to stay compliant with local & international labor laws. A reliable global payroll provider knows the ins & outs of local laws wherever you hire.
What can lead you to outsource your global payroll management?
1 - You Want to Gain Expert Tax Support
As an employer, you may not be aware of an employee’s country’s rules and regulations in terms of payroll. That’s why it is important to have an expert tax supporter who will help you to stay up to date with the employment laws, especially if you hire internationally.
Global payroll providers https://www.novative.com/en-us/international-recruitment-all-you-need-to-know/generally use an in country payroll software to automate tax calculations, withholding, and filings. These tools allow them to consider a complete set of rules related to payroll in different countries and to apply them to the calculation. The payroll systems are updated regularly to ensure compliance with legislative changes. Global payroll providers can also be liable for any fine or penalty you suffer if an error occurs that was within their control.
1 - You Want to Gain Expert Tax Support
As an employer, you may not be aware of an employee’s country’s rules and regulations in terms of payroll. That’s why it is important to have an expert tax supporter who will help you to stay up to date with the employment laws, especially if you hire internationally.
Global payroll providers use an in country payroll software to automate tax calculations, withholding, and filings. These tools allow them to consider a complete set of rules related to payroll in different countries and to apply them to the calculation. The payroll systems are updated regularly to ensure compliance with legislative changes. Global payroll providers can also be liable for any fine or penalty you suffer if an error occurs that was within their control.
2 - You don't have the necessary resources in-house
Running payroll internally requires dedicated resources, including time and staff. If your company is hiring internationally, the necessary resources to conduct payroll can double, triple or even quadruple. You will need payroll experts in the countries you hire to ensure compliance.
A payroll partner takes care of all tasks related to employee payroll, tax payments and legislative expertise. A global payroll partner takes care of these same tasks for each country you hire from. This not only saves you time, but also ensures centralized and organized payroll management for your international employees. By freeing up this time, you can focus on more strategic functions.
3- You are looking for greater security
Global payroll providers are companies that invest in state-of-the-art technology and provide redundant data storage* and multiple server locations. The security of confidential data is a priority for these companies.
Therefore, outsourcing payroll can mitigate the risks of falling victim to phishing attacks. Payroll providers provide security by limiting access to data to authorized users only to prevent the disclosure of sensitive information. They typically use firewalls, Domain Name System filtering (DNS), anti-phishing, spam, and virus prevention technology.
* In a nutshell, redundant data storage provides a real-time fail-safe against hard drive failure rather than an actual backup of your data or in other words, storing the same data in more than one place. The idea is that the other hard drives in the array can immediately kick in and save the day without any downtime.
4 - You wish to Save Money
In the long term, outsourcing payroll may be more economical. Payroll outsourcing saves you money because you do not have to pay for staff training, error correction, or being kept up to date with local, state, national changes to tax codes and other legislative concerns that affect your internal payroll processes.
Top considerations to choose the right global payroll provider
1 - Data Protection
When working with sensitive data such as confidential personal information, contact details, bank accounts and salaries, security must be the no.1 concern.
You may worry about giving someone access to sensitive employee information. This is a natural fear. That’s why you should look for a provider that makes the security of your data a priority.
An excellent payroll service provider should be able to provide simple access to your payroll data without sacrificing crucial security. Important payroll information must be stored on protected servers and have a physical backup station for emergencies.
Be sure that the payroll service vendor provides security in terms of confidentiality, integrity, and availability of the information recognized as critical to the operation and administration of the provider.
Before selecting your future global payroll provider, make sure that the provider scrupulously respects the data protection laws in each country where it operates (such as the GDPR in Europe). Another good indicator of data protection is compliance with certain standards such as ISO 27001. This compliance means that the provider has undergone a rigorous auditing process validating their payroll data protection. The ISO standard also represents a commitment to continuous security improvement.
2 - Tax Compliance Management
Tax regulations are changing constantly, and these regulations differ greatly from one country to another. There is no such thing as a one-size-fits-all solution.
That is why it is essential to work with a global payroll provider that has a tax compliance department to help handle these adjustments. A tax compliance team updates your payroll tax tables annually after your conversion is finished and assists you with year-end processing.
A good global payroll provider has experts in tax support in every country it operates. This team oversees checking your data to avoid potential errors on payroll and taxes.
3- Multiple Language Offers
By its very nature, global payroll involves several cultures, nations, and languages. While expecting your payroll teams to speak many languages is hard to achieve, you can anticipate that your global payroll provider will.
Also, having global payroll software with multiple languages will help the users to switch to the language they prefer. This means that each person can choose their favorite language in a shared service center. This way, two persons could be using the platform in the same section, one in French and the other in Arabic for example.
4- Consolidated Global Payroll
Different payroll providers will offer different HRIS to store your country & payroll data. This means that you must manually piece together the data from multiple systems. Having several payroll partners increases the risk of error and is time-consuming as you must switch from one to another to retrieve your payroll data. Additionally, because of the various systems, it is hard to compare data between the different countries.
With only one global payroll provider, these issues will be eliminated since you will have one payroll platform for all your subsidiaries worldwide. One place, one system to securely store your data. You will also access your data easily, gain data insights and be able to compare each payroll and this allows you to easily access your data, gain data insights & compare each subsidiary with the other.
5- Clear View of Workforce Spending
When companies grow & start expanding overseas, they must adopt the salary standards of these different countries. This means a business will hire people at various salary levels and with various benefit plans. Keeping track of the differences is challenging for businesses. If the company expands in different countries, the business will need a single and unified view of all spending to make sure its resources are being used effectively.
When choosing a global payroll provider to outsource the payroll process, you need to make sure that you can easily control costs. Check that your business can manage and oversee only one single invoice with all the payroll costs with no hidden fees.
6- User-friendly interface
A global payroll provider will supply clients with a secure platform on which payroll data is reported for each cycle. The ease of use of this platform is an essential criteria to consider when choosing the right provider.
Make sure that your future global payroll partner can provide you with a clear reporting interface that will make it simple for you to understand the insights and key performance indicators behind your payroll processing.
Learn and know what the provider’s core features are, and whether the management reporting dashboard is user-friendly and suitable for your company’s needs. Another feature to consider is ESS – employee self-service – which can be useful for employees if they need to access or modify their personal information.
7- Payment Methods
With the continuous changes that happen in the world, a lot of introductions of new payment methods have come out. Although SWIFT payments have always been a great option, they are now outdated. Nowadays, there are a lot of vendors that provide quick international payments in the currency of your choice.
To choose the right global payroll provider for your business, take the time to learn about the payment methods they offer. If your global payroll supplier can provide you with different and new payment options, it is worthwhile to partner with.
8- Customer Support
The quality of the customer services offered should be considered when choosing a provider.
Customer support is offered by all payroll outsourcing companies; however, the manner and timing of their delivery can differ.
That is why there are some questions to ask while you are determining the level of support offered by a payroll provider, such as:
- What credentials do the payroll support staff hold?
- How do they provide support? Via phone, email, chat, or pre-recorded tutorials?
- Do they provide a dedicated account manager?
- How much time does it take to respond to a request?
- Does their SLA (Service Level Agreement) fit the needs of your company?
Think about your needs and seek out a payroll provider whose service philosophy matches your business requirements and needs.
The importance of choosing the right global payroll provider cannot be ignored. Finding the ideal partner can help you expand your business globally by ensuring that you are in compliance with the tax and payroll regulations in foreign markets.
To choose the right global payroll provider, make sure that the selected one has the right features including data security, employee experience, easy integration with existing tools and scalability to future growth. It will help your business to grow globally.
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