The Ultimate Guide to Global Payroll Benefits: What You Need to Know

8
Min
The Ultimate Guide to Global Payroll Benefits: What You Need to Know
Written by
Mayank Bhutoria,
Co-Founder
July 11, 2024

Key Takeaways

  • Global payroll platforms enable you to hire and expand faster, enhance employee experience with accurate, on-time payments, and ensure compliance.
  • They offer a centralized platform to manage payroll and benefits and offer payments in local currencies for all employees. 
  • Alternative solutions to global payroll include paying international employees with multi-country payroll and onboarding international contractors.

As businesses expand their operations globally, managing a diverse workforce across multiple regions becomes crucial. Global payroll is a key element of cross-border workforce management, involving the processing and management of salaries, taxes, and benefits in compliance with laws in different countries. 

However, this process presents several complexities, such as navigating varying regulatory norms across countries, handling multiple currencies, and overcoming time zone and language barriers, among others. 

This article explores the benefits of global payroll platforms in addressing these complexities and provides alternative solutions for streamlining global payroll. 

Benefits of Global Payroll Platforms

Global payroll platforms provide a centralized and automated system for managing payroll processes for an international workforce. Here are some key global payroll benefits organizations can realize from using these platforms. 

Enables you to hire and expand faster

Hiring employees from different countries often requires companies to establish legal entities in each location and navigate varied payroll regulations — a costly, complex, and time-consuming process. 

Leveraging a global payroll platform can help you avoid this hassle. These platforms automate compliance with local labor and tax laws, thanks to in-house experts who proactively monitor any legislative changes and update the system accordingly. 

Not only do these platforms speed up employee onboarding through automated document collection and streamlined workflows, but they also reduce the time-to-hire by allowing employees to sign compliant contracts. The contracts disclose crucial employment details such as legal leaves, mandatory leaves, work hours, termination regulations, etc. irrespective of their location. This process takes minimal time and protects the company from potential legal issues. 

To make this easier, Gloroots’ salary calculator can be used to determine the right salary to be paid based on the employee’s location and designation. It presents the median salary figure for various roles in more than 45 countries.

Enhances employee experience with on-time, accurate payments across the globe

International payroll processes are often plagued by delays, errors, and inconsistencies, especially when payroll teams rely on spreadsheets. As a result, employees may receive inaccurate or late payslips, leading to dissatisfaction, decreased morale, and even possible legal action. This can be avoided by outsourcing your payroll operations to a global payroll provider or using a global payroll platform. 

Global payroll platforms integrate with existing systems and automate calculations, deductions, and currency conversions, minimizing errors and delays in global payroll processing. This ensures employees receive the correct payment on time, regardless of their location, leading to higher employee satisfaction, morale, and retention. 

Helps you become a globally compliant employer

Compliance is one of the most challenging aspects of global payroll management. This is because labor and tax laws and regulations vary significantly across countries.

For instance, in the United States, the Fair Labor Standards Act requires employers to pay overtime if their employees work over 40 hours a week. And unlike most other countries, the U.S. doesn’t mandate the 13th-month pay, which is common in some countries within Asia, Latin America, and Europe. 

In most Asian countries, the average work week is around 49 hours and the convention of 13th month pay is followed, where the time of payment also varies between countries. For example, China pays a 13th month salary usually around Lunar New Year, while Japan pays the same as a bonus during the summer. 

While the European Commission provides labor laws for their countries that cover working conditions, individual countries within the EU still have certain variations. For example, a working week in France is 35 hours whereas in Greece, it can go up to 41 hours a week. And in this region, countries like Greece, Portugal, and Italy follow the 13th-month pay convention, while other countries such as Germany, France, Austria, etc. don’t. 

Global payroll solutions help organizations navigate country-specific compliance obligations such as working hours, overtime calculations, holiday entitlements, etc. Streamlining global payroll strategy with automated systems will reduce the risk of compliance errors as labor and tax laws of various countries are configured into these solutions and are automatically updated in case of any changes. This ensures a compliant and reliable payroll system that adheres to local tax laws and regulations. 

Eliminates the need for multiple vendors

Managing payroll across multiple countries often requires businesses to engage with numerous vendors, either for a specific region, or for a specific service (e.g. payment processing, benefits administration, tax filing). This can be cumbersome and expensive.

A global payroll platform eliminates the need for multiple vendors by providing a unified, centralized system for managing payroll across all regions. These systems also combine payroll and benefits administration in one platform, streamlining administrative processes.

Ensures employees are paid in their local currency

Paying employees in their local currency ensures they receive their full salary without losses from fluctuating exchange rates or conversion fees. However, making payments in multiple currencies can be a complex task.

Global payroll platforms streamline this process as they handle different currencies and exchange rates, ensuring accurate salary calculations for employees. These platforms employ secure and efficient payment methods such as wire transfers, direct deposits, and local currency payroll cards to pay employees in their local currency, after proper tax deductions and mandatory withholdings as per local regulations. 

With global payroll platforms, you won’t have to set up bank accounts in each country to pay employees. You can also significantly reduce expenses related to currency conversion and mitigate the risk of non-compliance.

Gloroots is a global payroll platform that can seamlessly handle multi-currency payments. Employers simply have to pay one invoice in one currency for their geographically distributed team. From there on, Gloroots’ cross-border payment partners will make timely payments to employees, contractors, and freelancers in their local currencies, thus eliminating the burden of multiple payment transactions from the employer’s side. 

Success Stories in Global Payrolling

Mixam, a leading UK-based printing company, faced challenges in managing its global team as it expanded to new markets. The company struggled to understand the employment practices in different countries, complicating its global expansion efforts.

To effectively manage its growing team, Mixam partnered with Gloroots, gaining access to a suite of employee management services across various regions. The partnership ensured compliance with local employment laws along with timely and accurate payroll, reducing the company’s burden of managing HR operations in other countries.

With Gloroots’ support, Mixam was able to streamline the hiring process for international candidates, enabling the company to seamlessly grow its team and divert its focus towards core operations.  

Hire, Expand, and Pay Compliantly with Gloroots

Leverage a global payroll platform like Gloroots to enjoy the full range of global payroll benefits

Gloroots offers a centralized platform that acts as a one-stop shop for all your payroll management needs. With Glooroots, you can streamline payroll and benefits administration, provide accurate and timely payments to your global workforce, and ensure compliance with the local laws of every country where you operate.

Contact us to gain comprehensive insights on how we can streamline global payroll for your organization and ensure your employees are satisfied, wherever they are based. 

Frequently asked questions

1.How do global payroll platforms integrate with existing HR and finance systems?

Global payroll platforms integrate with existing HR/finance systems through APIs (Application Programming Interfaces) that allow for seamless data exchange. This integration ensures the synchronization of employee data, time and attendance details, salary information, and tax details, simplifying accounting/finance activities and crucial HR functions.

2.Can a global payroll platform scale with my business as it grows?

Yes, it can. These platforms are built to scale alongside the business, whether it includes increasing the number of employees, new geographical locations, more complex payroll structures, or regulatory changes. 

3.What should I look for when choosing a global payroll provider?

Essential features you need to look for when choosing a global payroll provider include global coverage, automation capabilities, integration facilities, employee self-service, high-end data security, 24/7 customer support, and compliance expertise.

4.How can I evaluate the reliability of a global payroll service provider?

You can check out the provider’s reputation through online reviews/testimonials and check out their official website to analyze their offerings and industry expertise. Also, check if the provider stays up-to-date with changes in payroll laws and regulations of other countries that they service.

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