It may be time to review your payroll systems and processes

The rise in flexible working has encouraged many employees to relocate overseas, either permanently or temporarily, while still working remotely for UK firms.

This trend offers employees a better work-life balance and often allows them to spend time exploring what other countries have to offer.

However, for employers, this creates new challenges for their payroll operations, which many businesses have not previously experienced.

If you find yourself in this position now or anticipate growth in overseas remote workers in your company, you may need to consider:

• Compliance – It can be difficult to keep up with the legislative requirement of payroll in the UK, let alone the accounting standards set in other nations. The rules and regulations differ greatly from country to country, but you must ensure the rules are followed correctly in each jurisdiction where you employ a person.
• Tax – How taxes are set, recorded and reported differ in each different nation. In the UK, workers are fortunate that in most circumstances the PAYE system helps manage their tax affairs. However, in many other nations, the requirements are different. Managing the tax situation can prove especially difficult when you also factor in social security contributions and the rule around them. In these situations, it pays to have professional help.
• Management – Managing and monitoring international payroll processes can be incredibly tough, as you are likely to have to deal with cultural, language, and time-zone differences. Managing the needs of overseas workers means you will likely have to invest more time and resources into your payroll processes, including time to learn and incorporate the rules for each jurisdiction.
• Currency conversion – It can be challenging to pay staff in multiple currencies and lead to huge costs in administration and fees. However, being able to respond to fluctuating currency rates will reduce exposure and protect your employees from market risk.
• Additional costs – Depending on the nature of a person’s deployment overseas, you may also need to consider paying for:
  • A Base salary and premiums
  • Cost-of-living differential
  • Housing allowance
  • Private health insurance
  • Education support for dependents
  • Home leave.

These costs are likely to differ from one jurisdiction to the next, adding extra complexity to employment.

We’re here to help

We understand the opportunities that hiring and retaining an overseas worker can add to a business, especially in highly skilled and hard to fill roles.

Thanks to our international network of connections, we can offer advice and support to employers so that they can take advantage of this opportunity without getting stung by the complexities of having to manage overseas workers on your payroll.

If you would like to know more about our payroll services and how they can help you save time and money, please contact us today.