A fundamental in any business, payroll is crucial in keeping employees satisfied and loyal to a company. A company that practices consistently prompt and efficient payroll is often among the most successful businesses, as it is proof that the company gives proper value to its workforce. As the saying goes, “Take care of your employees, and your employees will take care of your business.”
Given the significant importance of an efficient payroll system, it can get complex as a business grows, especially when a global expansion is involved. From only having full-time and part-time locals, the matrix requires some technical adjustments when international employees join the team. This is when a global payroll solution can help simplify and streamline the process.
Stages of Payroll Planning
Planning the implementation of global payroll management is just as important as the actual hiring process of global workers. Here are the steps to consider if you want to establish a successful global payroll system:
Consult with Local Experts
Creating a global payroll management system begins with researching the country where the international employee is based. You will need all the information necessary to make a competitive offer to prospective employees. Having a local expert to consult with gives your business a significant advantage in keeping up to date and compliance with local regulations such as labor laws and tax code changes. This information may be available online, but it doesn’t give much authority as when you have a local expert on-ground. Having one makes your payroll system more reliable and up-to-date while largely cutting the learning curve over these matters. The local expert can also draft the employment contract better than anyone else could.
Ask the Right Questions
Knowing the right questions to ask or research on could be a step that precedes finding a local consultant. This is a proactive method that is essential in the early stages of the hiring process.
The questions below are a good place to start:
- What are the standard working hours and the number of annual vacation days?
- What are the mandatory and non-mandatory benefits in the local market?
- What taxable items must appear in the payslip?
- What documents is the employer legally obligated to collect and hold for each employee?
These questions cover some of the common variances between one country from another. Examples would be whether a pension is part of social security or a benefit on top of social security and whether medical and life insurance is considered a taxable benefit or requires a separate form to accomplish.
Collect the Necessary Documents
Once the hiring process has been completed, the onboarding process follows.
Companies are responsible for the collection and safekeeping of employees’ documents. These documents differ from one country to another, but most would include relative forms of the following:
- Worker identification number/social security number/Tax identification number
- Work visa/I-9 Worker eligibility document/W4 form (or local equivalent)
- Application form/CV/Contact information
- Bank details
- Health and Pension benefits record
- Employee handbook (outline of company policies)
It is important that the company treats these documents with utmost care as mishandling these files could lead to severe penalties.
Integrate Global Payroll Software with Your Management Systems
After ensuring legal compliance and complete onboarding of employees, the final step is to implement a payroll and payment solution. With the complexity of managing a global team, it would be unreasonable to maintain a manual process.
HRIS is a human resource information system that enables companies to track and improve all HR administrative work, such as tracking costs, hours, attendance, and more. Having a global HRIS makes payroll reporting easier and more efficient by eliminating previously manual tasks.
Expenses management is a system that easily monitors and tracks employee expenditures and accounts for all outgoing payments such as business travel expenses and other employee-initiated costs.
Singe Sign-On (SSO) is a security procedure that allows users to access all their applications with a single passcode. This prevents people from repeatedly exposing their user names and passwords while using several applications.
Rivermate’s Global Payroll and HR Solution
Hiring overseas or managing a global team can be a major challenge for businesses. Rivermate makes global payroll and HR management easy for you by providing a neat and user-friendly platform, which consolidates your payrolls, employees and contractors, and builds trust between you and your employees by having a system that allows transparency of payroll. Workers are paid in their local currency and receive payslips in their native language through Rivermate’s secure portal.
Discover how Rivermate’s global payroll solution manages all aspects of payroll, including hiring, onboarding, managing, and paying a global team.