A Complete Guide to Global Payroll Services in 2023: Pricing, Compliance, Providers, and More
Last Updated: June 05, 2023
Reviewed By: Ashley Smith
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Managing payroll for a company that recruits international employees can be challenging. You need to consider different currencies, time zones, and languages. Fortunately, global payroll services streamline the process.
At CostOwl, we make shopping for the right provider easy. Our experts help you understand global payroll management and third-party options. Learn how to navigate this complex financial process with our comprehensive guide.
Understanding Global Payroll #
Global payroll is a system that manages the compensation of foreign employees and contractors.
Unlike domestic payroll, this process requires you to calculate correct deductions while balancing different countries' laws and regulations. Without the right help, you risk falling out of compliance and incurring penalties.
You will need a complete understanding of recruitment, international banking, and payroll practices to succeed. Third-party solutions are a great way to avoid managing these problems if you have limited in-house resources.
Global payroll services yield benefits such as:
- Centralizing your data with secure software programs
- Calculating local currencies instantly
- Delivering payments on time anywhere in the world
- Staying compliant with international tax and labor laws
- Automated bookkeeping
Balancing Different Tax Codes #
Each country has its own federal and regional tax income. Expect to comply with multiple tax codes when hiring international talent.
For example, employee tax rates may fluctuate due to identifying factors such as age or marital status. Additionally, some countries tax income, like bonus payments, differently than others.
International tax filing is tricky, but failing to report small details can create problems that compromise your business.
The advent of digital tax filing makes it easier for you to stay compliant with international codes. However, be aware that full-time employees and contractors manage their taxes differently. Have a thorough understanding of these expectations if you plan on expanding your business globally.
Operating in a New Market #
When operating in a new market, you should know the respective country's pay period, minimum wage, and compensation practices. Some countries may require you to process payments daily, which can be time-consuming and overwhelm an in-house staff.
Furthermore, some payroll practices may seem unfamiliar. In Greece, paying employees a "13th-month salary" is mandatory. Employees receive additional compensation at the end of the year along with their monthly salaries. Practices like these emphasize the need for third-party international payroll services.
Benefits Management #
Retaining global talent requires incentives. Investing in employee benefits is one of many ways to become an attractive employer abroad.
When building an employee compensation package, expect to pay for:
- Injury settlements
- And more
What you will pay depends on the country. Calculate social security costs to determine which investments are worthwhile for your company.
Sometimes these factors influence where employers choose to hire workers. With a global payroll service you can choose top talent from around the world without worrying about keeping track of different countries' benefits regulations.
Hiring an Employer of Record (EOR) #
Consider partnering with an employer of record when expanding internationally. These third-party entities recruit workers and manage their payrolls on behalf of clients. This solution lets you bring on qualified international employees without opening foreign subsidiaries.
EORs are cost-efficient avenues to enter a market quickly. They will comply with local payroll standards and free up other financial responsibilities on your end.
Suppose you want to keep hiring in a specific country long-term. In that case, EORs can be temporary solutions while you set up a legal payroll entity in the host country. Once your workforce exceeds 15 employees, it may be worth switching to a unified global payroll system.
Investing in a Global Payroll Provider #
Switching to a unified global payroll system is an essential step for expanding your presence abroad. Choosing the right provider and payroll model is crucial for keeping the wheels turning.
The two most popular models include:
- The Aggregator Model: Form a network of partners who provide valuable advice and support regarding local laws.
- The Wholly Owned Model: Operate payroll entities in each country.
Finally, automatic payroll software allows you to engage directly with different departments through intuitive programs. This tool is essential for staying updated on legal changes and identifying discrepancies.
The Best Global Payroll Providers #
Let's compare some of the top payroll providers' costs and services.
Papaya Global Prices
Papaya Global provides payroll services across 160 countries. Enjoy advice from international tax and labor law experts. Additionally, Papaya offers contractor management and independent contractor (IC) compliance for domestic and foreign workers.
- Payroll: $20 per employee (every month)
- EOR: $650 per employee (every month)
- Contractor Management & IC Compliance: $25 per employee (every pay cycle)
ADP Global Payroll Prices
ADP offers global payroll services for startups and companies with over 50 employees. Their enhanced packages include background checks and essential HR support. Negotiate with this company for a price that suits your budget.
- Essential Payroll: $4 per employee
- Enhanced Payroll: Pricing available through a sales representative
- Complete Payroll: Speak to a representative for pricing
Oyster Global Payroll Prices
Oyster offers global employment options for up to 180 countries. This provider specializes in IP protection and liability to secure payroll data. Furthermore, Oyster provides localized support centers that maintain two-way communication when you need it.
- Contractor Management & IC Compliance: Starts at $29 per contractor/month
- Business: Starts at $599 per employee/ month billed monthly or $499 per employee/month billed annually
Remote Payroll Prices
Remote provides expert EOR and contractor management services. Remote onboards workers quickly with localized contracts and compliance. Partner with Remote to discuss custom pricing options for additional solutions.
- EOR: $299 per employee (every month)
- Contractor Management: $29 per contractor (every month)
- Customizable Options: Book a consultation to discuss pricing
Globalization Partners Payroll Prices
Enjoy excellent customer support and payroll processing for 187 countries with Globalization Partners. This company is ideal for protecting digital assets with General Data Protection Regulation compliance.
- Contractor Services: $49 per contractor (every month)
- Recruiting Specialists: Custom-priced
- Global Payroll: Speak to a sales representative for customizable payroll and HR pricing
CostOwl helps millions of people research pricing options for global payroll services. We provide recommendations and quotes to get you the information you need.
- GPA - Supporting Payroll Professionals Globally
- ADP Global Payroll
- IRS: Persons Employed Abroad by a U.S. Person