Does your business operate with a digitally remote workforce?
Perhaps you are starting to recruit globally dispersed staff, digital nomads, and contractors?
The world of international payroll is very complex and can seem daunting.
Here are a few crucial considerations for you and your payroll management.
- In which country is the worker a tax resident?
If they are a British tax resident and travelling around the globe while working, or perhaps based a few months a year in another country, then it is most likely that your payroll would run in the same way as your other contractors or staff based in the UK.
If you spend 183 days or more per tax year living/visiting the UK you are automatically considered a tax resident. You may also have to pay tax on income earned abroad.
- Are they contracted as a permanent member of staff or as a Self Employed worker ?
Legal obligations will differ depending on the country in which the worker is a tax resident. For example, in most of Europe a self-employed contractor is responsible for paying their own taxes but if they are contracted as an Employee, it is the responsibility of the Employer to deduct taxes at source.
- Which currency are you paying them in?
If you are paying them in another currency, be aware of foreign exchange (Fx) rates and fees. If their bank account is in another country check transaction compatibility. For example, when transferring money to a Turkish account from a Euro account, it may not be simple to pay in Turkish Lira. Or if you are paying a Spanish national who has moved to another country and no longer using their Spanish bank account, you’ll need to find an alternative payment method.
- How do you ensure legal compliance for tax and contractual obligations?
If you have Employees or Independent contractors who are tax residents of other countries, it’s important that you partner with payroll experts with local knowledge and experience will ensure you remain legally compliant and stay compliant to those laws as they change.
For assistance with running international payroll, freelance payments recruiting and onboarding staff and contractors across the world, take a look at our Global HR Solutions.
