Global payroll is how an organization manages paying its global workforce. This will include calculating how much they are owed, withholding taxes where relevant, managing expenses for freelancers and employees, considering benefits and bonuses, logging working hours and time off, ensuring the business is compliant with any national or local labor laws, and of course – practically making worker payments accurately and on time. It’s no mean feat!
If you’ve only ever paid employees on a traditional payroll, and you’re struggling with adding freelancers to the mix, check out Fiverr Enterprise, a Freelancer Management Platform that allows you to pay all your freelancers with one monthly invoice.
To understand why global payroll matters, and what best practices to follow, keep reading!
Global payroll vs. local payroll
Traditionally, many organizations worked from a single location. With all workers full or part time employees and usually based at the same office, payroll was local and straightforward. Finance teams simply needed to learn one set of local laws and regulations, and pay a set number of people, generally the same salary each month, allowing for variances for sick days or parental leave.
However today, even small companies can have to grapple with global payroll. Companies regularly high remotely, or have freelance or contract workers hired for a set project or timeframe who do not work from company HQ, if there even is a company HQ. And while local payroll is simple, global payroll comes with a whole lot of complexities in terms of compliance and labor laws in different countries.
How does global payroll work?
If you form a global payroll strategy, it will involve centralizing all of your worker data and being able to create a process for paying all of them at the right time. Some organizations outsource global payroll to a third party, such as an Employer of Record that works locally and takes on employment in a specific region on your behalf, or a Professional Employer Organization that enters into co-employment with you.
In other cases, an organization may choose to manage global payroll in-house, but this will involve ensuring they can legally work with all employees in their home country, centralize the payroll process without any gaps, and understand cultural norms, benefits, and regulations in every region.
What are the benefits of global payroll?
Keeping payroll local, and siloing management of payroll to each local region may feel easier than creating a global payroll strategy, but there are a number of benefits to global payroll:
- Better visibility: A single view of all operations is a smart move for any business. With a consolidated payroll, HR teams can answer queries like which region is the most expensive, or where there are gaps.
- Compliance: Outsourcing payroll to a third party or a local accounting team doesn’t mean you can sidestep compliance. Ultimately, the buck still stops with you which means you need to have full control.
- On-time payments: Global payroll processes means nothing falls through the cracks. If team members aren’t paid accurately and on time, it’s the most surefire way to drop morale and cause discontent.
- Increased productivity: With global payroll handled centrally, teams have more time to focus on more strategic work. An automated solution for payments like Fiverr Enterprise means no double checking figures – everything just works.
What are the challenges for global payroll?
Of course, setting a centralized process for global payroll doesn’t come without challenges. You’ll want to decide how to set compensation for remote workers and freelancers who live and work in regions with totally different salary expectations. You’ll need to think about your model for onboarding a global workforce, whether it’s compliantly hiring employees in another country, or utilizing a freelancer model while being safe and lawful with employee classification. You’ll also need to consider tax management for employees, including withholding correctly, filing the right documentation, and understanding differences between regions.
Best practices in global payroll, and how Fiverr Enterprise can help
Fiverr Enterprise is a SaaS solution that gives you full visibility and control over your entire freelance workforce by allowing you to source, hire, onboard, manage and pay, all while ensuring compliance, so your teams can work faster and maximize business growth.
When it comes to global payroll for freelance talent, Fiverr Enterprise is a robust solution for any enterprise. Here are 5 best practices to follow that can streamline the process of freelancer global payroll from end to end.
1. Understand your legal and regulatory requirements
Misclassification means different things in different countries. If you misclassify a worker as a freelancer, you could be liable for steep fines and heavy penalties. You need to make sure you have the right contracts and documentation signed, and that your agreement is totally above board.
2. Choose the right partner
Global payroll should be something that runs in the background without too much effort on the part of your teams. Choose a partner with a proven track record in the business, who understands freelancers and the different ways in which they work, and can accommodate with flexibility..
3. Integrate with HR and Finance systems
With smart integrations, you should be able to connect all freelance spend to a purchase order, invoice, and cost center. Make sure you have various ways to pay global talent, whether that’s by hour, project, or milestone. Fiverr Enterprise allows for one click payment of all freelancers, across 190 countries and 80 currencies.
4. Establish KPIs for payroll processes
Want to be sure payroll is running smoothly? Make sure you have Key Performance Indicators in place to report on your payroll processes. Track planned vs actual spend, monitor missed payments and compliance risk, and easily show the value of your solution to the C-suite.
5. Stay on top of emerging technology trends
If you’re still managing freelancer payroll manually as a time-consuming add-on to your “normal” payroll, you’re missing a trick. Fiverr Enterprise helps you put a stop to chasing invoices, endless payment negotiations, or sifting through spreadsheets, and allows you to automate and streamline global payroll for freelance talent.
Want to learn more? Talk to one of our workforce experts today on how you can scale the way you work with your freelance workforce.