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What Is Multi-Country Payroll?

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If your business plans to have an entity in one or more foreign countries, your distributed workforce must get paid compliantly and accurately. Here’s what you need to know about multi-country payroll and how it supports your international team.

What Is Multi-Country Payroll?

Multi-country payroll is an automated payroll solution that allows businesses with international entities to pay employees in multiple countries. Multi-country payroll combines payroll, time, and expenses on one platform to help you compliantly pay your global workforce.

4 Benefits of Multi-Country Payroll

There are many benefits to using multi-country payroll that ultimately help you stay globally compliant, consistent, and efficient in paying your international employees. These benefits include:

1. Country Compliant Payroll Processes

If you have employees in other countries, you must comply with local labor laws and taxes. It can be time-consuming and complicated to learn the differences in foreign payroll regulations from your HQ country. A multi-country payroll process navigates local laws for you and helps you stay compliant.

Learn more about global payroll compliance.

2. Reduction of Payroll Reruns

Payroll reruns occur when adjustments or corrections need to be made to employee payments after they are processed. Multi-country payroll reduces the need for payroll reruns by accurately calculating contributions and payments the first time, saving time and costs in the long run.

3. Payroll Automation for Multiple Countries

With standard multi-country payroll solutions, businesses can process payroll in multiple countries and save time and effort. Multi-country payroll enables automatic payments and consistent payroll, no matter how many countries your workforce spans.

4. Integration With Time and Attendance Management

In addition to payroll automation, a payroll platform can integrate expenses software and time and attendance tracking. As a result, your HR tasks are streamlined into one easy workflow.

Learn more about our technology integrations.

When to Use Multi-Country Payroll

There are several instances when multi-country payroll is necessary, such as:

Growing Out of an EOR Model

Multi-country payroll is used by businesses that are ready to establish entities in other countries. For example, your company has partnered with a global employer of record (EOR) to manage global payroll on your behalf in countries where you do not have entities. Now you are ready to set up an entity in those countries, but you still need a payroll provider for your workforce.

Multi-country payroll ensures that your employees continue to receive consistent and accurate pay through your transition to entity establishment.

Maintaining Legal Entities in Multiple Countries

Similar to a business growing out of its EOR model, multi-country payroll is also a solution for companies with existing legal entities or that have a plan to set up entities and are in need of a payroll provider.

Transitioning Through a Merger & Acquisition

Companies often take on new employees in other countries where they don’t have an entity through a merger or acquisition. Multi-country payroll is a quick solution to continue paying your newly acquired workforce without the added work of setting up new entities.

Consolidating Multiple Payroll Vendors

Some businesses set up their own international entities and opt to use a local payroll provider in each country, but this can be cumbersome, time-consuming, and expensive. Consolidating all of your payroll vendors into one multi-country payroll provider saves time and centralizes data.

Supplementing Bandwidth or a Knowledge Gap

Sometimes HR and payroll teams don’t have the experience to run payroll on their own or don’t have the bandwidth to manage international payroll providers. Multi-country payroll helps supplement these gaps, allowing your teams to focus on day-to-day operations.

Alternatives to Multi-Country Payroll

There are alternatives to using multi-country payroll to pay your distributed workforce. However, these methods are less streamlined and will most likely cost you more time and money.

Use Multiple Payroll Providers

As mentioned above, some companies go the traditional route of setting up their own entities and finding a local payroll provider in each country.

But this also means that the company has to manage multiple providers, and payroll data is dispersed among separate vendors, which leads to potential payroll errors and more time spent on the payroll process.

Continue Using Payroll from an EOR Partner

In some cases, an EOR provider might not offer a multi-country payroll solution, so a company will continue using its EOR partner’s services for payroll.

This option is likely more expensive, and you may end up spending more money on continuing EOR services. The payroll through an EOR provider may also run separately from your business’ HQ country, resulting in more time spent managing multiple vendors.

Pay Your Global Employees With Velocity Global

No matter how you choose to grow internationally, multi-country payroll is an important tool in your global expansion toolbelt. Velocity Global’s Multi-Country Payroll platform helps you tackle international payroll accurately and compliantly, wherever your global workforce is located.

Reach out to learn how Velocity Global’s solutions can streamline your global operations and expansion needs.

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