How to Do Payroll, Pay Employees, and Stay Compliant

Payroll has become one of the most complex and high-stakes functions in global operations. For today’s teams, accuracy, compliance, and trust are as important as the payments themselves. Whether you’re managing a local team or a global workforce, getting payroll right protects your business from penalties, ensures employee satisfaction, and keeps operations running smoothly.

This guide explains how to do payroll, how to pay employees, and how to calculate a payroll check, with best practices drawn from Deel’s experience supporting companies in over 130 countries.

While these steps can be applied universally, they must be carefully adapted to each location’s tax codes, reporting rules, and employment laws to ensure full local compliance.

1. Gather employee and company information

Start by collecting all relevant information before you run payroll. You’ll need:

• Employee names, addresses, and bank accounts

• National ID or tax identification numbers

• Employee tax filing status

• Compensation details, including annual salary or hourly rate

• Benefits selections such as health insurance and retirement plans

• Signed employment agreements or independent contractor contracts

2. Choose a payroll schedule

Your payroll schedule determines how often you process payments. Common pay period options include:

• Weekly: Popular in hourly or shift-based roles

• Biweekly or semimonthly: Common for medium and large companies

• Monthly: Typical for some salaried employees and international workforces

Choose a pay schedule that aligns with local minimum wages, cash flow, and labor law requirements.

3. How to calculate a payroll check

To calculate a paycheck, you need to take the employee’s gross pay and apply the appropriate deductions and withholdings to determine the net pay.

Local regulations regarding state and local taxes, pay frequency rules, and other local compliance requirements will determine the exact payroll calculation process. Always verify these requirements before running payroll.

Determine gross pay

Calculate each employee’s gross earnings:

• Hourly workers: total number of hours worked × hourly wage (+ overtime pay)
• Salaried employees: annual salary ÷ pay periods
• Contractors: project-based or invoice-based payment

Include bonuses and commissions to reflect total earnings.

Apply deductions and withholdings

Deduct required items:

• Income tax based on tax bracket and filing status (single, married, head of household, etc.)
• Pension, insurance, or social contributions
• Employer-provided health insurance
• Retirement plans and other benefits
• Wage garnishments, if applicable

Calculate net pay

After all deductions, you’ll get net pay—the employee’s take-home pay.

Example:

Run payroll instantly with Deel’s real-time payroll

Deel’s real-time payroll engine calculates gross-to-net pay instantly, across multiple countries. You can see total employer cost, gross pay, and net pay immediately after submitting your data—no delays, no third-party dependencies.

Key benefits include:

• Real-time accuracy and faster approvals

• Unified payroll processing for all locations

• Flexible submission cut-offs

• On-the-spot error correction

• Consistent global reporting

Learn more about Deel’s real-time payroll feature.

4. File and remit taxes

Every country has unique requirements for employer tax filings. File and remit taxes to the appropriate authorities by their deadlines. Many jurisdictions now require electronic submissions for income tax, social contributions, and employer levies.

Accurate tax filings and timely submissions ensure compliance and smooth tax return preparation at year-end.

5. How to pay employees

The right payment method helps ensure accuracy, timeliness, and compliance while accommodating employees’ different needs around the world. The best approach often depends on local banking infrastructure, currency regulations, and workforce composition.

Common ways to pay employees include:

• Direct deposit/bank transfer: The most widely used method, where salaries are transferred directly into employees’ bank accounts on payday. This method is secure, traceable, and supported in most countries.

• On-demand or early access pay: Some companies now offer flexible access to earned wages before the end of a pay cycle, like Deel’s Anytime Pay. This can improve financial well-being and employee satisfaction.

• Crypto payroll: A few employers, like Deel, now offer eligible employees the option to receive pay in cryptocurrency. While still emerging, this can support fast, low-cost transfers if regulations and volatility risks are properly managed.

• Digital wallets and online payment services: Useful for global or remote workers who may not have local bank accounts.

• Payroll cards or prepaid debit cards: Employers can issue reloadable cards that function like bank accounts, allowing employees to receive their pay, make purchases, and withdraw cash. This is common in regions with limited banking access.

• Mass or batch payments: For larger teams or multinational companies, batch payment systems make it easier to process salaries for many employees at once, helping maintain consistent pay periods and reduce administrative time.

• Cash or paper checks: In countries or sectors with limited digital infrastructure, cash and checks remain in use. However, these methods carry higher risks and make recordkeeping and tax filings more difficult.

6. Keep accurate payroll records

Maintain payroll records for at least three to seven years, depending on local law. These should include timecards, pay rates, tax documentation, and copies of payslips. Storing digital records in a secure system reduces errors and supports audits or employee queries.

How to streamline payroll

A smooth payroll process reduces administrative work, improves accuracy, and enhances employee experience.

1. Automate payroll

Payroll automation handles recurring payments, tax submissions, and benefits deductions automatically. Deel Payroll connects payroll, HR, and accounting systems to simplify reconciliation and tax filings.

2. Centralize data

A single source of truth for employee records, payments, and tax data minimizes errors. Deel provides 110+ enterprise-grade integrations, uses open APIs to unify data from third-party providers, and is a Workday GPC-certified partner.

With Deel Payroll Connect, you can pull all of your payroll data into one standardized Gross to Net report by consolidating your Deel payroll reports with those from your third-party payroll providers, creating a truly global view of your payroll operations.

3. Empower employees with self-service

Self-service portals allow employees to access payslips, update bank account information, and adjust benefit selections independently. This cuts admin time and improves transparency.

4. Conduct regular audits

Periodic payroll audits help identify discrepancies in hours worked, overtime pay, or deductions. Track KPIs such as error rate, late payments, and audit findings to improve continuously.

Run payroll your way with Deel

With Deel Payroll, you can automate payroll calculations, compliance, and payments in 130+ countries for any type of worker.

Whether you're looking for a self-service US payroll software, fully-managed global payroll, or independent contractor payment solutions, Deel provides it all in one modern platform.

Book a free 30-minute product demo for a personalized product walk-through with an expert.