manage international taxes and benefits

How to Manage International Taxes and Employee Benefits with Deel

Ensure timely and accurate tax payments and employee benefits administration for your international employees: fast and easy, all in one place with Deel.

Stefana Zaric
Written by Stefana Zaric
June 26, 2023
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Key takeaways

  1. When you hire international employees, you need to ensure full compliance with local employment and tax laws in the country you hire from.
  2. Statutory employee benefits and tax regulations vary by country and involve minimum wage requirements, health insurance, paid leave, unemployment insurance, and more.
  3. Deel helps companies automate tax calculations, ensure global compliance in over 150 countries, and track and manage compliance documentation simply and in one place.

In Nigeria, full-time employees are entitled to 6 days of paid time off per year. Both full-time and part-time employees in Colombia are entitled to 15 working days of paid time off a year. Full-time employees in Israel are entitled to 12 days of paid annual leave.

When you start hiring from foreign countries, you may become exposed to non-compliance risks because of how employment laws and mandatory employee benefits vary by country.

Deel eliminates the need to work with multiple HR and payroll vendors to ensure full global compliance and allows you to focus on business strategy instead of admin. Keep reading to learn how our services help you manage international payroll taxes and statutory employee benefits—compliantly and hassle-free.

Disclaimer: This post is US-focused. It’s provided for informational purposes only and should not be considered legal or tax advice. Please consult with professionals for guidance before taking any action.

Manage employee benefits with Deel step by step

Deel helps you offer the same set of benefits you may already offer to your local team. The Benefits Admin feature lets you set up and configure the benefits you want to support, and our custom integrations make it easier for your team to put the perks to good use.

Here's what the process looks like.

Step 1

Outline your desired benefits package and provide your budget to your Deel onboarding team.

Step 2

Your Deel team will help you clearly configure the plan pricing, tiers, or any applicable eligibility rules to ensure that employees understand their available options.

Step 3

Each time you add a new employee on the Deel platform, you can attach the desired benefit offering to the contract.

You can also add extra perks to your offer, such as equipment rental, coworking space membership, stock options, or Deel’s healthcare plan.

employee contract perks

Step 4

Employees review the benefits and complete enrollment in the Benefits section in their Deel dashboard.

deel platform sidebar

With our Benefits Admin feature, you can configure your own employee benefit packages, easily access, and review the details of the benefits through the platform.

💡 See also: How to Create an Employer of Record Contract (EOR) on Deel

You can easily make sure your employees have their mandatory vacation days by tracking their time off through Time Off by Deel. This user-friendly plugin streamlines PTO requests and approvals by putting them on autopilot and eliminates the endless back-and-forth communication between workers and managers.

Effortlessly submit tax documentation with Deel

Even if a business fails to pay the taxes (correctly) unintentionally, it may get fined. This can often happen when you hire globally and are unaware of all the tax requirements in a foreign country. It can be easy to let a special tax or deadline simply slip your mind.

For example:

  • In Spain, the Beckham law provides a tax advantage to foreigners, who, rather than paying a progressive tax on their worldwide income (ranging from 19% to 45%), are eligible to pay a flat fee of 24% on the income they earn within Spain.
  • In Germany, churches collect a tax of 8-9% of their members' income. Citizens must formally declare that they want to leave the church to opt out of this tax.

Deel provides an easy way for users to collect data and generate tax forms, which are a vital part of compliance and a necessary step to run a risk-free business. You can store your collected forms on Deel and access them at any time, which is particularly suitable in case of an audit.

Here’s an example of how US tax forms are handled within the platform:

Step 1

When a contract is created, Deel uses the provided information to generate the necessary forms such as W-8BEN, W-8BEN-E, 1099, and W-9.

Step 2

Go to your Tax forms tab and select the country for which you want to pay the taxes. Deel generates W-8 and W-9 forms automatically.

Step 3

Review form details to ensure all information is correct and click File to send paperwork to the IRS. Also, your records will be kept neatly on the platform.

💡 See also: Tax feature on Deel: Here's how it works

Deel feature you’ll love:

Deel’s Global Gross to Net Report allows you to see all your G2N totals across all Countries, Entities, and Payroll Cycle in a single currency.

gross to net deel report

Understanding the importance of statutory benefits and international tax compliance

Employee benefits typically include healthcare coverage, retirement plans, paid time off, disability insurance, and more. When you hire employees, it’s your responsibility to take care of at least a portion of these benefits.

When businesses neglect their responsibility of paying payroll taxes, it triggers two significant consequences:

  • The genuine employees lose out on their rightful protections and entitlements, which the government aims to safeguard
  • The contractor needs to compensate for the unpaid taxes, resulting in a depletion of tax revenue for the government

Employers who deliberately avoid paying payroll taxes may face severe consequences. These can include hefty financial penalties, legal liabilities, reputational damage, and even criminal charges.

💡 See also: Payroll Compliance Checklist and Tax Law Guide for 2023

In 2021, Holland Services misclassified 700 employees. The DOL’s investigation of this case led to almost $43,277,000 the company owed in back wages and damages.

Read more about employee misclassification penalties

Companies operating internationally need to understand the tax regulations and obligations in each jurisdiction, ensuring proper classification of employees versus independent contractors and complying with the local statutory requirements for employee benefits such as healthcare, retirement plans, and social security contributions.

Prioritizing compliance helps mitigate legal risks, maintain positive business relationships, and uphold a strong reputation in the global market.

EORs like Deel have in-house experts who have the local tax know-how, ensuring accurate tax calculations, deductions, and filings and minimizing the risk of tax-related penalties.

An employer of record can implement robust financial systems and processes to track and maintain accurate records, streamlining financial reporting according to local accounting standards and reducing the risk of errors or non-compliance.

EORs also conduct regular compliance audits, reviewing financial records and processes to identify and rectify any discrepancies or potential non-compliance issues.

When you hire employees with Deel, we take on all of the responsibility to make sure you’re compliant with local laws.

  • We make sure all the right payroll taxes, social contributions and other governnment fees are paid
  • All mandatory local benefits, like health insurance and pensions, are handled for you
  • We handle payroll, payslips and all things HR admin so you can focus on your business

✅ With Deel, you can also:

  • Convert a contractor into an employee when the nature of your business relationship surpasses contractor-client relationship
  • Use localized contracts tailored to each country’s specific employment and tax laws
  • Use Deel Shield to fend off misclassification risks and reduce your liability


Calculate employer costs, taxes, and benefits beforehand with Deel's hiring tools

Not ready to hire just yet? Deel is here to help even before you hire your first international employee. We offer several tools and calculators to assist you in understanding employer costs of potentially hiring workers in other countries.

Global hiring guide

Explore how you can hire international workers with our Global hiring guide.

Learn about statutory employee benefits, onboarding practices, termination requirements, taxes, and more in 150+ countries. Deel owns 100+ entities worldwide, and in countries where we don’t own an entity, you can work with our trusted partners to hire employees quickly and compliantly.

deel's global hiring guide

Global hiring toolkit

Say goodbye to global hiring guesswork and calculate your potential costs for employees in over 100 countries. Use our global hiring toolkit to access hiring insights around the globe—from compliance documents to real-time salary insights—so you can make an informed hiring decision.


deel's employee cost calculator

Handle international employment taxes and benefits with ease

Managing international employment taxes and benefits doesn't have to be daunting.

While we were very comfortable with hiring locally, we were apprehensive about the costs and legal responsibilities for compliance in the United States. We didn’t want to hire full-time HR people to figure out things like health benefits and filing tax returns with the IRS. [...] We know we can trust Deel to manage the complexities of hiring in the US. It’s something we have to get 100% right, for our people and for our business.

Matthew Buchanan, Co-founder, Letterboxd

With Deel as your partner in global HR, you’ll be able to file tax documents in a snap, right from your dashboard, and easily ensure your international employees have access to all the mandatory benefits they’re entitled to in their home countries.

Deel handles taxes and compliance in-house: that means you can rely on 200+ payroll and legal experts to ensure you operate risk-free, no matter where you hire.

Book a 30-minute product demo with expert Q&A today.



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