Managing International Payroll and Overseas Salaries
Global payrolls can be a challenging, time-consuming, and costly endeavour for companies to manage. When paying employees in multiple locations, a number of issues can arise, from being able to send reliable payments to ensuring that you are meeting legal and compliance-related regulations in each country in which you are conducting business. Overseas payments for payroll can also cause complications for management, as it can often be difficult to consolidate global payments into one location to make it easier for management to analyse outgoings and make accurate predictions and business decisions.
There are a number of providers today that offer specialised international payroll solutions for companies that must send money worldwide. These providers offer simplified processes and integrated technological solutions, and help to reduce the cost of paying in multiple locations and currencies, without the need to maintain multiple foreign currency accounts or an administrative presence in each country in which employees are being paid.
Benefits of International Payroll
Using a specialist international payroll provider for foreign currency payroll payments provides benefits to both the business and to the international employee. An integrated payroll system allows you to compile, analyse, and forecast your fx international payments to employees, helping your company to better respond to fluctuating currency rates and the needs of your employees. By being able to forecast and respond to market volatility, companies can reduce their exposure and help protect both themselves and their employees from market risk.By using a specialised international payroll provider for their payroll needs, companies can pay their employees in the employee’s local currency and prevent them from absorbing conversion costs or suffering from a poor conversion rate, as well as ensuring that employees do not bear the risk or cost of volatile foreign exchange transfer markets.
International payroll providers also offer a safe and cost-effective way for companies to make overseas money transfers in the form of payroll payments. They provide a high level of customer service, with cutting edge technology solutions that integrate easily into most companies’ payroll and accounting systems, and customer service that is often available 24 hours a day, seven days a week. Companies also have the benefit of using payroll service provider’s systems to receive detailed reports and analysis of payroll payments, often broken down by region, and have secure online access to all of their payroll data.
International payroll providers also can offer lower fees for their services than many more traditional service providers, such as banks. Many service providers can even provide this service for a minimal fee or free of charge, depending on the type of business the company does with the service provider. If the company is transferring currency abroad regularly with the service provider, then fees for certain services may be waived entirely.
International Payroll Case Study
Product: International payroll solution
Issue: Need to send Payroll payments globally from one location
Business Goal: Send employee payroll payments from one location instead of multiple locations, manage and reduce currency risk, cut down on administrative costs, comply with all local and international employee payroll regulations, and increase visibility of cash flow and payroll payments
- A media group company had 60 employees out of 300 living across 17 countries to man its international news bureaus. Each location had payroll on a different day, and its own rules and regulations that the group needed to follow. The company had employed numerous different payroll and accounting firms to pay out international employees, resulting in increased administrative costs and an inability to consolidate global reports. This resulted in less oversight and a lack of critical analysis of the company’s international operations.
- When the group found an international payroll service provider, they were able to configure their systems so that each payroll region was included into one consolidated report and they could manage the payout of 17 currencies. This made it easier for the company to analyse their payroll payments and ensure that they were accurate and compliant with all international rules and regulations that pertained to their employee paychecks.
- The company was also able to save administrative costs by having one single source file for all payroll needs, instead of having multiple accounting and payroll provider firms for each region. This single source system allowed them to consolidate all payroll files and have one source for their payroll operations going forward.
- By working with a specialist provider, the company also saved on the foreign exchange costs of having to deal with 17 currencies for its 17 bureaus.
International Payroll Risks and Issues
Choosing an international payroll service provider that matches the needs of your company is important, as this can help your company to ensure that it follows all applicable rules and regulations for each location where you are sending paychecks, as well as ensuring that your employee payments are received by your employees in a consistent, timely manner.
Be sure to choose a provider whose systems can support your international payroll needs, and that their customer service is available to help you fully integrate the systems and troubleshoot any problems that may arise.
Other helpful resources
Information and support for HR and global mobility managers at Relocate Global.