How to Pay International Employees Remotely

The decision to hire foreign employees comes with the responsibility of handling their financial welfare. This aspect must be handled carefully to avoid violating policies. If you/your organization decide to move in the direction of global expansion, establishing a subsidiary will certify that all HR-related issues are resolved rightly. However, if you/your organization only want to hire people across the globe, they must get paid to work overseas. Moreover, matters concerning payroll, salaries, taxes, and benefits must be handled by capable hands. This is because most times, employees want to get paid to work abroad. In the light of this, it will be best to engage the services of an employer of record like WeHireGlobally. This will ensure that all pertinent details that are concerned with your international employees are handled swiftly and efficiently. EOR will ensure that your global workforce will get paid to work from home speedily and safely.

What problems can arise when you want to pay your international employee?

Hiring foreign workers or even expanding globally does not come without its challenges. Most companies are often charged with the responsibility of providing answers to the following payment questions:

  • How much does it cost to employ someone within another country?
  • How do I pay an employee in a particular market/industry/country?
  • How much taxes do I pay if I work overseas or hire talents remotely?
  • Is it possible to pay workers without taxes? If yes, how much can I pay someone without paying taxes?
  • How much is overseas pay for a specific job in a particular market?

Answers to the above questions are enclosed your statutory obligations to your potential talents and intended nation. Understanding the regulations of the intended country will save you/your organization from breaking the laws. Whether it is starting a business in a single location or several countries, learning regulations and observing them can prove to be a challenge. When it comes to knowing how to pay international employees, certain hitches are commonplace. It is important to be informed to be able to resolve them when encountered. Some of these problems will be addressed below.

Regular Tax Payments 

To avoid issues with local authorities, you need to deduct the right taxes from your employee’s pay. You also need to take into consideration, taxes such as income tax, payroll tax, and social security. Countries have spelled out specific regulations for these as well as the date for returns. It is important to know the type of tax to be deducted and the amount as regulations differ across borders. Your organization also needs to keep a proper record of all tax documents to be accountable in the event of an audit by the authorities of the foreign country. This will help to avoid serious penalties.

Local Customs 

Businesses are generally influenced by the customs of the society they operate in. You need to be well-informed of such customs as it affects the work tradition of your foreign employees. This could also affect their payroll systems. For example, in certain countries, people are used to getting their paychecks by a certain date. If you are not aware of this, you can be charged with exploitation. Also, certain countries don’t work on some days and will only resume certain hours. Proper knowledge of these details will help your work relationship with your foreign employees. You need to keep track of the date and time for payment in each location where you have employees. This in itself is challenging.

Legal Concerns

There are legal pronouncements that are binding on the employment systems of different countries around the world. If a law states one thing in a country, it might not be the same in another. For example, the health policies of a certain country can cover some non-working days and will require you as the employer to pay a specific amount. You need to know what provisions have been made for foreign employees under the laws of their country. These legal disparities can be hard to keep up with as they can change at any time. Also, engaging the services of legal practitioners to handle issues from time to time can be overwhelming as it costs time and money.

Keeping Track of Working Hours 

It is crucial that to have an effective payroll system for your foreign employees, you need to understand the number of working hours required in the designated country. While some countries permit a 45-hour working week, others will only permit less or even more hours without a limit for their citizens. Since some employers are required to pay per hour, it is important to know the number of working hours for accurate calculation of all payments to be made and also to ensure that workers are not underpaid. To avoid crossing the limit, your payroll has to be efficient to take account of working hours and make provision for extra working hours.

While planning a good timing for your employees, you must be sure of how long you can stay in a foreign country. To implement this, you must consistently conduct auditing, update yourself with the country’s policies and get external consultancy for reliability. Accurate knowledge of the labor laws will save you from an ineffective payroll system or even underpaying your foreign employees. Be that as it may, it is difficult to keep track of working hours across different geographical time zones.

Differences in Currency

Complications can arise when selecting a means to pay internationally. With the constant change in currency rates, the differences between currencies will warrant that you stay informed. For geographical locations that make use of the same currency, such as countries that belong to the European Union, paying your employees will not be difficult. Some countries also accept the dollar as a means of payment to their citizens alongside their currency. Often, it might be necessary to affix the salary of your foreign employee in their home currency so that currency fluctuations will not affect the amount agreed upon.

Having mentioned these challenges, they might create a cause for concern when you are looking for how to pay your international employees. Notwithstanding, an employer of record like WeHireGlobally is a ready solution to these issues. From ensuring tax compliance to abide by local customs, handling all your legal procedures, and making sure your employees are paid rightly and on time, WeHireGlobally will handle your payroll and HR operations.

Factors to consider when deciding how to pay an overseas employee

As financial remunerations for the delivery of services is paramount, it is also necessary to examine the factors that come into play. When determining how to pay foreign employees, there is a lot to consider. Downplaying these factors will lead to wrong decisions and violation of policies. When you think of how to pay your employees overseas, think about these factors as well.

The category of worker that is being hired

Foreign employees are categorized differently. To decide how to pay, you need to determine who is being paid. The type of worker that is being hired needs to be taken into consideration; a foreign employee or an independent overseas contractor. It can be quite easy to misplace one for the other. Some countries spell out the roles of a foreign employee and that of an independent contractor. To distinguish between the two will be to help determine what will be paid and how it will be paid. To avoid this will be to risk violating labor regulations of the locations where you intend to or already have employees. So that your foreign employees will not be treated as independent contractors whereby denying them of their full benefits, you need to consider the labor regulations of the country to know who is who and who does what.

Currency to be paid 

Because employment is cutting across borders, the currency is an important factor to be considered. To reach an agreement on how much will be paid for services rendered, you need to consider what currency will be used. Your home currency and your foreign employee’s currency need to be considered as regards exchange rates. As currency fluctuations are constant, you need to keep up with the currency rates and agree on which will be the means of payment. This is important to ensure that your employee is being paid their service’s worth. Often, you may not find a direct connection between your home currency and that of your foreign employee, and you may need to consider different payment methods.

Regular payment of taxes

Crucial to the development of any economy, you also need to consider tax deductions and their remittance. It is important to know the type of tax to be paid and how applicable the tax laws are in different locations. Employing a worker in a foreign location means you will pay taxes as an organization in your home country as well as in the foreign country. This will result in double-taxation. Some countries have provisions for issues such as this. It is referred to as a tax treaty. If your organization is in this situation, you will need to know what countries offer tax treaties, to which countries they offer them as well as the treaty model being used. This will help you cut down on unnecessary expenses as tax treaties help you balance between the two countries. You also need to be aware of the right amount or percentage to be paid and the due date. This will help in transparency as an organization with operations in a foreign country.

Paying Overseas Employees Compliance 

Complying with employment laws when it comes to tax and payroll is essential. As an organization, managing a reliable global pay stub that is compliant is one of the best options for your employees. Employers of record have made payroll processing easy with their up-to-date and advanced global pay stub. One of the distinct EOR solutions of WeHireGlobally is an advanced global pay stub. If you’ve ever thought of how to do payroll for one employee or pay your overseas employee with the proper payroll in a law-compliant manner, WeHireGlobally offers one of the best EOR solutions to walk you through this. You don’t need to worry about how to pay your employees, who exactly to pay, or even tax deductions. 

Options: How to pay your overseas employees remotely

Your overseas employees must be taken into consideration when it comes to how to a start business in another country and how to pay internationally. This is because several hitches can stunt your growth if proper steps are not taken. To guide you on the right steps to take, here are some options for you to consider when paying employees remotely:

Paying through a local partner

One way to pay your foreign employees is to attach them to the payroll of another organization in the designated country that is associated with yours. This will work if your organization has a subsidiary in a foreign country. It will be easy for such a subsidiary to become the employer and be the means through which salary is paid. With this form of partnership, your organization only needs to send the amount to its local partner, while the local partner does what is necessary and acts as an umbrella company for the employee.

Placing your foreign employee on the payroll of your home country

This option can be effective when your employee is on a short-term assignment in a foreign country. If it becomes long-term, the policies of the foreign country become binding, and you have to abide by its payroll system. With a short-term arrangement, you still have the responsibility of catering for the financial welfare of your employee, notwithstanding the location. For example, if an organization decides to send an employee to another country for a few months, the responsibility of compliance with payroll still lies with it. If this arrangement becomes permanent, compliance with the laws of the foreign country becomes an issue.

Outsourcing Payroll

Of all the options available, outsourcing payroll duties to another organization are more reliable than some. This is because when it comes to how to pay your employees, an employer of record is a great solution. To guarantee that your employees get paid to work overseas, they have a ready structure to handle recruitment and payroll. An EOR like WeHireGlobally will guarantee compliance with regulations while ensuring that your overseas employees are appropriately paid.

Paying your remote employees as independent contractors 

It may seem as though working with contractors is a problem-free solution; your organization does not need to be a registered entity in the foreign country, you’re not required to pay taxes on their behalf, your relationship is contract-based, meaning they are only required to work for a certain number of hours as opposed to a full-time employee, and you are not required to pay any benefits and remunerations.

Business owners should note that there are differences between how to pay my employees and how to pay overseas contractors. Overseas contractor jobs salary is dependent on the terms of agreement with the contractors. This dependency is one of the reasons why overseas contractors salary is a risk to any business. You can’t pay the contractors like you pay your employees. Overseas contracting jobs salary may not be recorded for tax filing as contractors might overlook it or decide not to pay. While paying your employees, however, you must be compliant with all regulations on how to pay your employees since they must have tax returns. Thus, paying your employees is safer than paying contractors, but the former should be carried out by an EOR as a safer mode.

In summary, whatever means of payment you choose should be locally compliant with the policies of the foreign country. It will also be best to hire an employer of record to take the burden of seeking a means of paying off your shoulders. This will also make sure that your employees get paid to work overseas without hitches.

How to Pay International Employees Remotely?

  • How do you pay remote employees?

    There are several options for your consideration when it comes to paid work abroad. These options are: paying through an organization that has links with yours, paying through your home country payroll, paying a foreign employee as an independent contractor which is a risky venture, and paying via a well-structured EOR like WeHireGlobally.

  • Can a US company pay foreign employees?

    Yes, a US company can pay foreign employees. However, it is important to note that compliance with regulations of the foreign country is necessary. Why? Employees must be awarded the necessary benefits with financial issues such as tax deductions, insurance, and pensions properly taken care of. A US company can either set up a subsidiary or hire an EOR to do this. The company has to fulfill the proper duties of an employer to employee, the different locations notwithstanding.

  • How to hire a foreign employee?

    A foreign employee can be hired based on global expansion or just on a short-term basis. Requirements for recruiting foreign employees differ across countries. Some countries will require a certain type of work visa and other certifications. To help with the hiring process, it is best to hire an employer of record like WeHireGlobally.

    Pay your international employees in a compliant manner with WeHireGlobally.

    With WeHireGlobally, you get to pay your foreign employees with a payroll that is compliant with regulations. You can partner with us in more than 150 countries across the globe. Take advantage of our up-to-date labor law guide and enjoy compliance as well as satisfied employees. Are you thinking of how to pay your foreign employees? Come on board with WeHireGlobally to get started.

  • Hannah Kohl
    Hannah Kohl. Head of Customer Success. Has extensive experience in the HR and IT industries. Helped 100+ international clients to achieve their global goals.

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