Global Payroll: Top 5 Challenges and Solutions

Whether expanding domestically or internationally, having freelancers and independent contractors is now a normal part of business. Ensure you choose the right global payroll service provider to minimize risk to your business. Read on to find out more.

Global payroll is a complex process that goes beyond the function of paying employees. Its entire management— from international compliance and currency exchange rates to compensation and benefits packages is what makes global payroll a demanding operation. 

Digital technology has empowered global payroll service providers to deliver payroll functions with accuracy and efficiency. It enabled businesses across all industries to elevate their payroll, whether through an employer of record (EOR), professional employer organization (PEO), or in-house if the company has the capacity and resources to manage global payroll internally. 


Global payroll challenges


Global payroll’s complicated process can be multiplied by the number of countries it serves. Global payroll is payroll processing repeated on a larger scale when an international workforce is hired. With the help of technological solutions, the administrative burden and overwhelming process are organized and automated in a single platform. 


Here are the five main challenges of global payroll: 


  1. Compliance

Labor laws and tax rules differ in every country. In some cases, these laws conflict with local jurisdictions that have their own regulations. In addition, employee tax rates also vary according to salary, age and family status. And these regulations are updated from time to time. Global payroll must comply with taxes, employee classification, social security, healthcare requirements and compensation.


  1. Employee Classification

Employee classification is part of compliance that companies should not overlook to avoid penalties or business bans. Each country has their own definition of employee and worker classification for tax purposes. An individual can be an employee or self-employed, which payroll handles differently.


  1. Data Management & Security 

Data management includes storing employee information, attendance reports, expense reports, benefits packages, etc. Most technological platforms used in global payroll have enhanced security. International standards such as GDPR in Europe and CCPA in the United States ensure high standard data security.


  1. Cost Management 

Global payroll requires spending on technology and experts for its implementation. As your company prepares for international expansion, review how much the business is willing to add to the budget for global payroll services. Or if the business has one, do you know how much you spend on the technology and infrastructure for implementing global payroll?


  1. Reporting 

Nowadays, there’s no excuse for delayed reports and delivery of wages. Real-time reporting and payroll accuracy are crucial. An entire global workforce involving amounts of data is managed in a single global payroll platform. The data, in some cases, have different formats, language and currencies that need to be standardized.


Global Payroll Outsourcing 


Global payroll outsourcing such as CXC has the network and resources to provide efficient global payroll solutions.  Reputable global payroll services have the following criteria to ensure that businesses are partnering with a reliable global payroll organization: 


  • Scalability

Global payroll solutions should be scalable as companies expand domestically or internationally. Adding new payrolls from different countries should not be a complicated process for the provider. CXC manages payroll in 75 countries. Our systems are digital, efficient and fully compliant.


  • Enables international payments

Freelance workers and contractors are now a normal part of the business. CXC is known for first-rate management of contingent workforce payroll for some of the world’s leading start-ups, tech companies and enterprises.


  • EOR and PEO Services

With EOR or PEO, companies have a trusted partner who will take the legal and administrative responsibilities while employers focus on expanding their business. CXC have the expertise and tools to handle the responsibilities – from accessing global talent, employee engagement & performance, to global workforce mobility.


  • Expertise in local and international compliance 

Competence in global compliance is a must for global payroll providers. Non-compliance can cost the business more money if they fail to meet the requirements. CXC actively manages compliance risk and protects your business from unnecessary risk exposure. CXC also assists with worker classification, background screening and right-to-work assessments. 


CXC is a global HR outsourcing organization with 30 years of experience in workforce management. Our innovative and cost-effective solutions help companies gain a competitive advantage by improving efficiency while reducing risks. 

Contact CXC today to start enabling your future workforce.