Remote work continues to dominate the workplace culture, with high-paying companies now looking at international talent, hiring foreign employees to fill vacant positions that would’ve otherwise cost them double or triple for the same workers in their home country.
Across several regions, companies are hiring employees outside of their borders, as many of them benefit from remote-only working conditions and the stronger dollar compared to foreign currencies.
Skilled workers in Latin American countries, in particular, have benefited from the remote working trend, as these countries often share the same time zone and are within relatively close proximity to the U.S.
Between 2020 and 2023, the number of U.S. and North American countries hiring new workers in Central America and the Caribbean has swelled by more than 300 percent, according to industry research by Lightcast.
With companies becoming borderless, keeping track of payroll processing becomes an increasing effort for small and medium-sized enterprises. Facilitating efficient, safe, and reliable payroll management requires businesses to adhere to different tax laws, income payment processing, and submit accurate information to local tax authorities.
Simple steps to streamline payroll processing
Keeping track of employees across multiple offices and time zones and having to deal with a slew of different tax laws requires proper payroll facilitation. Luckily managing international payment and payment processing has become easier in recent years due to the advancement in financial technology systems.
However, failing to provide sufficient automation for payroll could lead to further challenges in the near and short term, often causing major backlogs in payment completion for international employees, and running into problems with local taxation authorities.
The following steps will give a clear, and perhaps a more concise review of how businesses can streamline their payroll procedures to avoid unhappy employees and delayed payments.
Formulate Payroll Policies and Guidelines
For any business to function correctly, it’s essential to have predetermined criteria to help minimize any possible friction. Often, companies have employee workplace policies to curb the possibility of toxic workplace environments, micromanagement, or perhaps bullying.
However, in this regard, the exact need to be established for payroll, especially when a company works with international employees. As a good starting point, organizations must ensure that the proper guidelines and policies are in place, outline how payroll procedures will take place, and whether or not employees will be required to set up international bank accounts.
Formulating remote working policies will ensure that all employees, regardless of their level of appointment, their location, or time zone are treated equally. This helps to further minimize any potential errors that could arise during the payroll procedure and helps to establish a mutual understanding between employees and employers.
Communicate Payment Dates
As part of payroll policies and guidelines, another facet that employers need to consider is the effective communication of payment dates. Typically, businesses run their payroll on a monthly cycle, with wages being distributed to employees either at the beginning, middle, or end of the month.
Companies must ensure that they adhere to and comply with local jurisdictions regarding their payment procedures. Depending on the type of compliance matters, companies can set up how they will distribute payment to all their employees.
This will need to be clearly communicated to employees. This is usually stipulated in employment agreements or contracts. Employees will then need to communicate with their employers whether these days or dates are sufficient, and if changes need to be brought on in case of any potential grievances.
Create Deadlines For Payments
According to a survey of 4,000 employees, nearly half – 44 percent – said they had been paid late by their employers. In the same survey, 48 percent of those paid late were also paid incorrectly.
The resulting factor of missing employee payments or paying late, even by a few days, could lead to employees feeling dissatisfied, unhappy, and lower levels of company loyalty.
The survey found that 44 percent of respondents said that if an employer paid them incorrectly, they would consider leaving their job.
Employers must understand the importance of setting deadlines for employee payments. This is especially important for international remote working employees, where payments can take several hours, often days to be cleared and approved by local financial authorities.
Having deadlines a week or several days before the payment due dates ensures employers and payroll officers are fully informed of when payment deadlines are coming up. This also translates into the ability to budget for different payments that may occur each month and allows employees to plan for scenarios where payments may be delayed properly.
Manage Appropriate Compliance
While it’s important to remain compliant with domestic authorities in classifying employees, distributing pay stubs, and adhering to tax codes, the same can be said about international and cross-border payments.
Depending on whether employees are paid through a company bank account or any other type of account, appropriate measures need to be established to ensure that payroll expenses are recorded and stored for future taxation purposes.
Elsewhere, it can be wise to review international requirements for companies to hire and pay their foreign workers and whether the headquartered country may have tax agreements with the countries where their employees work from.
These tax codes and compliance matters can be arduous and often require a trained professional’s assistance. For small companies and even larger medium-sized enterprises, it’s advised to consolidate with financial and tax experts to ensure the business adheres to different tax jurisdictions.
Utilize Effective Payroll Management Software
For any business to effectively operate a remote working business model, utilizing management software can be key to its success in the long term.
Incorporating digital-savvy remote management tools, from employee collaboration to payroll, is essential for any business looking to establish a global presence and effectively manage its international remote teams.
Several dozen different payroll management systems can help alleviate mundane payroll tasks for employers, especially in smaller, less equipped teams.
Employers and payroll managers must use the right software to meet business demands. Whether they may have five or fifteen employees worldwide, these systems can help automate a majority of payroll tasks, helping to free up time for financial officers and ensuring that accurate employee information and data are securely stored in one place.
Remember that using payroll software might require business owners to have a proper budget to acquire these systems. If they want the best service, they will need adequate financial resources to pay for these automated payroll services.
Outsource Remote Employee Payroll
In scenarios where businesses cannot acquire adequate payroll management services, outsourcing these tasks could help save time and money in the long term.
More than this, outsourcing these types of tasks ensures that businesses can effectively utilize payroll service providers’ advanced technology without ever needing to pay for it or having to acquire it themselves.
Another benefit of outsourcing international remote employee payments is that payroll service providers can inform businesses about any tax regulations, policies, and jurisdictions they must adhere to.
Even if a company has employees scattered across different regions and parts of the world, payroll service providers have the resources to facilitate successful payment procedures for businesses.
Furthermore, payroll service providers often work closely with local tax authorities, which could further help during tax submissions. This could minimize potential errors and misclassification of employees and help navigate different banking systems.
Final thoughts
Facilitating existing payroll services is perhaps already a challenge for some organizations and small business owners, not to mention managing international remote working employees’ payroll.
Nonetheless, taking into consideration the importance of efficient payroll services ensures that remote working employees are paid on time, all of the time.
Proper payroll facilitation further consolidates companies’ ability to care for their remote working employees but also adhere to and comply with international and local banking systems and tax regulations.
While it may seem easy from the onset to get these systems up and running, employers need to make careful considerations and effectively facilitate the proper management of their remote employees’ payroll to establish a sense of trust and loyalty.
Featured Image Credit: Photo by Tima Miroshnichenko; Pexels; Thank you!
The post Six Simple Ways to Streamline Payroll Management for Remote Teams appeared first on Calendar.
This story originally appeared on Entrepreneur
