Guide to Paying International Employees
With the rise of remote working, businesses are continually expanding on a global scale. Regardless of where your employees are based in the world, it’s essential that all staff members are paid promptly and efficiently.
Paying international employees can be more complicated than domestic payroll due to the differing tax and social security rules from country to country, which can impact how much overseas staff take home each month.
Thankfully, it is possible to make international payroll and overseas salaries more manageable by implementing the right strategy.
Read on to discover the challenges and options available to businesses paying international employees.
The challenges of paying international employees
There are many aspects to consider when paying overseas staff members, all of which can put a strain on your HR and Payroll departments if not conducted efficiently.
Some of the main challenges when paying international employees include:
- Being tax compliant for all relevant countries
- Complying with social security rules for all relevant countries
- Managing payments in multiple currencies
- Currency fluctuations impacting overseas salaries
- International transfer fees
Paying international employees from the UK
For UK businesses who need to pay employees overseas, there are several different financial aspects to consider which can all vary depending on the employment scenario.
A non-resident employee
For overseas staff members who will permanently work remotely within their home country, pay as you earn (PAYE) will not have to be deducted and employees can be paid on a gross basis from your UK payroll.
In most cases, UK businesses will not have to withhold tax unless you have a corporate entity within that particular country. If this is the case, you may need to set up a local payroll to withhold tax.
If your overseas employee was then to conduct a portion of their job in the UK, there is a chance they could face two sets of tax deductions from each country, so many businesses tend to avoid this set up.
It is always best to speak with a professional regarding the specific circumstances of your business to check how you could be affected.
Setting up an international payroll for overseas employees
Setting up an international payroll is an ideal way to consolidate the process of paying multiple overseas employees in various countries.
Whilst there are several options available, to choose the right solution for your business, it’s essential to consider:
- How many international employees you are paying
- The number of different currencies involved
- Cost of currency fluctuations
- Cost of managing multiple currencies
Businesses must secure the right solution for their specific needs. It can become stressful for those who attempt to manage international payroll in-house. Some may find it beneficial to outsource the process to a global payroll service whilst others may find it more fitting to turn to a foreign exchange service.
Business foreign exchange solutions for paying international employees
There are multiple foreign exchange solutions available which can help businesses save time and money when sending international business payments.
The benefits of using a currency specialist for Foreign Exchange (FX) business needs include:
- Send payments in multiple currencies
- Secure competitive exchange rates
- Set up automated payments
- Monitored 24/7 by professionals
- Mitigate currency volatility risks
- Avoid costly bank fees
- Provide a consistent service
- Ensure international employees are paid quickly
Halo Financial can help your business ensure consistent prompt payments to your overseas employees and take away the stress of international payroll.
To discover how we can help you find the best solution when paying international employees, please give us a call on 020 7350 5474.