Managing payroll is one of the most important tasks involved in running a business. Even when teams are all in one location, it’s easy to encounter challenges while executing payroll management. For global teams, the task becomes much more complicated. 

Companies are increasingly operating globally with employees spread out across the world. Every new country or region you hire in adds another layer to your payroll management. Before you know it, your internal HR team can get overwhelmed. That’s why it’s vital to fully understand multi-country payroll and develop a system that works for your company. 

Defining multi-country payroll

Multi-country payroll is simply the process of managing payroll across multiple countries. 

Typically, payroll involves calculating earnings for each employee and withholding the appropriate state and federal taxes. The company then needs to distribute paychecks and keep correct financial records for all employees.

Multi-country payroll is the same process on a global scale. A company with international employees needs a multi-country payroll system to manage the varying payroll rules and regulations in each country.

For example, if your company hires people in Denmark, Argentina, and Senegal, then you’ll encounter different rules for:

• Tax laws and deadlines
• Regulations for classifying employees 
• Minimum wage laws
• Mandatory employee benefits, like health insurance 
• Exchange rates and currencies

For each employee in each new country, your team would have to understand and manage all the above. Doing so manually just once might be feasible, but it’s much more complex with a whole distributed team. That’s what makes multi-country payroll so difficult.  

Even though independent contractors are not technically on employee payroll, companies working with independent contractors around the globe also need to be familiar with multi-country payroll operations. 

The challenges of multi-country payroll

Local compliance

Arguably the biggest challenge for companies executing multi-country payroll for distributed teams is staying compliant with all local payroll rules and regulations. Sometimes, there are even conflicting laws at the federal and state level. Keeping all these laws straight and remaining compliant is complicated and labor-intensive for any company with international employees. 

International money transfers

The payment method you use for domestic employees may not be available for all international employees. Either way, you’re going to deal with international money transfers as part of multi-country payroll. These transfers often involve additional documents and fees that can quickly add up. 

Data security

Digital systems can make managing payroll easier, but they can also open companies up to data security problems. The payroll department handles a lot of sensitive employee information, like Social Security numbers and bank account details. Keeping that data safe and confidential isn’t just a moral imperative, it’s also a legal responsibility in many areas. The General Data Protection Regulation (GDPR) in the European Union, for example, regulates how global employers handle employee data. International companies need proper procedures for adhering to data security laws and protecting employee information while managing multi-country payroll. 

Oyster’s multi-country payroll software

Successfully maintaining multi-country payroll operations is essential to your organization’s reputation and ability to earn employees’ trust. The solution to the challenges of setting up and operating a complex system isn’t to avoid hiring international employees or to make the HR department try to handle the growing list of payroll tasks. 

It’s much simpler: Take advantage of Oyster’s multi-country payroll software. Our platform helps make setting up and managing multi-country payroll easier than ever. 

Automating your multi-country payroll through the platform allows your internal teams to focus on what they do best and leave the tedious payroll management to the experts. It solves many of the payroll-related challenges you’ve probably been dealing with and offers a host of benefits. 

The results of using our multi-country payroll software? Increased efficiency, greater data security, and complete compliance assurance. 

Contact us today to start reaping the benefits of Oyster’s multi-country payroll software.

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, hire, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.