How to Find the Best Global Payroll Providers for Your Company
Need help onboarding international talent?
Navigating international payroll is one of the top challenges for companies pursuing global expansion. International tax regulations, local laws, and local currency conversions keep companies from making timely payments to global employees.
The easiest solution (especially for small businesses and start-ups) is outsourcing your international payroll services. This article will show you how to identify the right international payroll solution, including which security features to look for and how to spot a great user experience.
1. Determine if you should bundle your payroll with other global HR servicesYou can save time and money (and streamline your outsourcing experience) by bundling your payroll services with other HR solutions. Sticking with a straightforward global payroll provider makes sense if:
- You’re only outsourcing basic payroll tasks
- You have a limited budget
- You have a well-functioning HR team but no payroll specialist
You’ll benefit from bundling your HR solutions if you also need help with:
- Benefits administration
- International hiring (but don’t want to set up a foreign subsidiary)
- Employee and contractor onboarding and offboarding
- Human resources support and general workforce management
A global PEO (professional employment organization), also known as an employer of record (EOR), can provide these services and more. When you hire a global PEO, they become the legal employer of your workers. They take on all legal and financial responsibilities while you manage the employee’s day-to-day. Global PEOs also handle compliant payroll, tax filing, and other global employment and business needs.
Learn more about what an EOR is and how it works.
2. Compare their coverage to your global workforce’s locationFinding a new payroll provider every time you hire in a new region takes up valuable time and resources. Instead, partner with a provider that offers broad global payroll coverage.
Document the following information before you start your search:
- Where your current employees and contractors reside
- Where you want to hire workers from in the next 6-12 months
- Where you may hire workers from in the next five years
- Where you don’t want to hire workers from
Be region-specific, as some countries have different labor and tax laws for each state or province.
Review the information with potential payroll providers to ensure you’ll get the coverage you need in the short and long term. Ask them about their plans for expansion, too—a good global payroll provider will consistently expand their operations to handle a new country’s payroll.
3. Look for a great user experienceYour team will interact with your provider’s system, so it must be easy to use. Especially if you plan to onboard in large numbers. A bad user experience will become a frustrating, time-consuming experience for your employees and contractors.
A great user experience takes more than technical features. High-quality customer service and support will make the payroll experience more enjoyable and efficient. Ask yourself the following questions when comparing global payroll providers:
- Can employees easily upload tax forms, banking information, and other documents?
- Can you sign documents electronically?
- Does the payroll software feel intuitive to use?
- Does the software offer clear, detailed paycheck confirmations?
- Do they have a team of in-house experts who can answer questions about compensation, benefits, and international hiring costs?
- Can you easily access customer support 24/7 via a chatbot, a direct email address, or a phone number?
- Does the payroll integrate with your other tools, like human capital management (HCM) and human resources information software (HRIS)?
- Do they provide helpful online resources like blogs, guides, or videos?
4. Check that you can pay both employees and contractors
Not all global payroll providers can help you pay foreign contractors. Some providers have limitations based on the contractor and company locations since countries have different definitions and payment requirements for independent contractors.
Check that your global payroll provider can manage processing payroll for your contractors and assist with worker classification and compliance. Due to the complexity, many companies outsource these tasks to a multinational payroll provider. Without a payroll expert to guide you, you can’t be sure you’re complying with the contractor’s local payroll and labor laws.
Learn how to pay foreign independent contractors.
5. See if they have customizable reporting featuresA great global payroll provider will enable you to produce real-time reports that tell you where your money is going and when. This function is vital if you want to stay prepared for a potential audit.
Your provider should also offer an easy-to-use dashboard that gives you payroll data at a glance. At a minimum, you should be able to filter your data by employee, date, and location.
Make a list of the quarterly, annual, and ad-hoc reports and data sets your team will need and compare it against the provider’s reporting functions. Here are a few ideas to get you started:
- Fiscal year-end reports
- Year-to-date reports
- Tax collections
- Tax filings
- Wages paid
- Hours worked
- Overtime paid
- Bonuses paid
- Pension costs
- Social security contributions
6. Choose a service provider that can scale with your businessIf you don’t pick a global payroll provider that can scale with your business, you’ll have to go through the provider search again in a few years. You’ll also have to transfer your employee data and retrain your team on new processes and systems.
The right global payroll service will make growing your global company easier, not harder. Having a long-term payroll provider also helps you maintain a positive employee experience and reduces disruptions to your workflow. Here’s how to identify a scalable global payroll provider:
- They regularly add new features and services
- They consistently update their security protections
- They don’t limit the number of employees/contractors you can have on the payroll system
- They’re expanding their operations to new regions
- They offer a variety of payment methods for payees
- They offer mass-payment options
7. Look for flexible global payment methods
Providing payees with various payment methods can help you attract forward-thinking talent. Standard payment methods include direct deposit, SWIFT payments, money transfers, and money orders—but today’s workers are looking for more unique options.
Since November 2020, there’s been a 10% month-over-month increase in workers wanting crypto payments. Then there are pay cards, which provide even more flexibility with funds. International workers often prefer pay cards and crypto to receive their pay in a more stable currency.
8. Prioritize providers with strong data securityYour global payroll provider will need access to sensitive employee data, including names, contact details, banking details, and tax information (Social Security Numbers and Tax Identification Numbers). Only work with providers who offer top-shelf payroll security.
Your provider should have a data processing agreement (DPA) to protect your worker’s data and information. A DPA ensures the provider handles data correctly and follows GDPR guidelines to prevent potential data breaches and abuse. These protections also guarantee secure data processing and legally protect your company if the provider mishandles data.
Ask these questions to understand a provider’s security measures:
- How are passwords stored?
- Do you require two-factor authentication and single sign-on authentication (SSO)?
- How is your customer data encrypted?
- What is your data retention policy?
- What is your procedure for granting users access to sensitive information?
- What is your process if a breach of information or unauthorized access occurs?
9. See if their payment model works for your business
If you’re a small or medium-sized business or have a tight budget, you need to know where your money is going and when to expect changes. Since there are so many payment models available from global payroll providers these days, you can choose the best model for your business.
Most payment models charge per employee or contractor. The cost per contractor is typically lower than the cost per employee. As for payment schedules, expect monthly, quarterly, or annual payments.
Providers often offer quote-based pricing based on company size, required HR solutions, employee salary, and location. Some providers offer reduced rates for bundled services, custom pricing for enterprises, and discounts for start-ups.
10. Weigh pricing against features
A global payroll provider may fit your budget—but are you really getting the most value for your money?Below you’ll find a list of the most common features offered by global payroll providers. The price for each feature varies depending on the provider. When comparing providers, request a breakdown of their pricing to see how much money each feature will cost you:
- Basic payroll tasks (payroll management, payslips, tax filing)
- Worker classification and compliance checks
- Customer service or help desk access
- App management
- Benefits administration
- EOR services
- IP rights protections
- Contractor management
- Set-up fees
See how Deel’s pricing model works and what it includes.
11. Ask them about their implementation process
Understanding a payroll provider’s implementation process will clarify your team’s role within it. Ask your potential provider which of your team members need to be involved in the process and what their time commitment will be so your team can plan accordingly.
You’ll also want to know how long it will take to implement the service, given your requirements. Ask for a sample timeline so you can give your team a general idea of the process.
This is also your opportunity to learn more about their implementation process and ensure information security. Ask the provider how they add new countries and employees to the system, whether they outsource any part of implementation to a third party, and the documentation they provide during the process.
12. Take your time during the sales process
It’s your right to do as much research as you want during the sales process. Read customer reviews to see what others have to say and check multiple sources to get a wide range of feedback. We recommend websites like G2 for global HR solutions or Capterra for Canadian businesses.
Reach out to your network of business owners and HR professionals for recommendations. If you have an extensive network, share a post asking for recommendations on LinkedIn. If you don’t have an extensive professional network, post your message on a related message board on Facebook or Reddit.
Most providers offer a free 30-day trial. Or, at a minimum, they’ll walk you through their offer with a free demo. The provider will need some basic information from you before booking a trial or demo, like your business name, location, number of employees, and the services you need.
13. Consider submitting a request for proposals (RFP)
A request for proposals (RFP) is a document companies send to potential vendors to learn more about their services. Companies can send RFPs to multiple vendors and use the information they gather to make an informed purchasing decision.
In this scenario, you can use an RFP to invite potential global payroll providers to provide information on their company, services, security, implementation process, and more.
We’ve created a straightforward RFP template that you can send out to potential payroll providers and EORs. The template is a Google Drive file, so it’s easy to customize and share.
Frequently asked questions about outsourcing global payroll
Here are a few final insights into the global payroll process and how outsourcing can benefit you.
What are the benefits of outsourcing global payroll?
Outsourcing global payroll benefits your HR team and any worker you pay through the system. It’s more cost-effective than hiring and retaining an in-house payroll department and minimizes the risk of payroll errors.
Global payroll providers also have high data security standards, so you can rest easy knowing your employees’ and company’s sensitive information is well protected.
Dive deeper into the benefits of outsourcing global payroll.
What is the difference between global and international payroll?
Global payroll and international payroll are two names for the same process. But remember, standard payroll and global payroll/international payroll are different. Standard payroll providers follow domestic labor and tax laws. They can’t help you maintain compliance when paying foreign employees or contractors.
When should you outsource payroll operations?
If recurring payroll tasks are pulling your HR team away from core initiatives, it’s time to outsource your payroll operations. Some business owners turn to outsourcing because of the convenience—they want a one-click solution to easily pay their employees and contractors en-masse.
Most global teams outsource global payroll management to protect themselves. They want to ensure full compliance with different countries’ labor laws and local tax regulations. Plus, they don’t want to deal with the complex processes of paying international employees or contractors.
What is the best global payroll for small businesses?
Most global payroll solutions will work for small businesses, mid-level companies, and enterprises. But there are some specific features and services that small business owners should seek out.
Choose a global payroll provider with high-quality customer support. If you’re a small team or a new business, you want experts you can turn to anytime. If the provider has a collection of informational resources for your team, like blog posts, videos, or guides, that’s a bonus.
You may also want a global PEO or EOR instead of just a global payroll provider. They can take on more HR functions and minimize your legal and financial risk—and you can focus on building and growing your business.
Simplify global payroll with Deel
Making global payments shouldn’t be a challenge. With Deel, you can fund payroll with just a click and automatically calculate taxes without lifting a finger.
Our multiple currency options and various withdrawal methods make it even easier for your team to get paid on time, every time, so that you can have one happy team.
Sound like something your business could use? Reach out, learn more about global payroll, and book a demo to see Deel in action.