How to Set Up A Payroll System For Remote Teams

In this article we’ll share tips on how to set up a payroll system for remote teams.

The covid 19 brought significant changes to the future of work. Before the pandemic, only 17% of United states employees worked remotely for five days.

The number quickly spiked during the pandemic to hit 44% of American working online for five days.

What does the future of the payroll system hold? You might encounter challenges when handling payroll systems for remote employees, such as effective management. How do you solve it?

 Follow the tips below to set up an effective payroll system for your remote teams.

Tip 1: Set Up Employee Profiles

Employee profile is crucial since it helps the organization identify the type of remote employees on your team. Additionally, the profiles help an organization understand international laws that it should follow, such as:

  • Paying taxes, withholding taxes, and minimum wages
  • Benefits accrued to every employee

Creating employee profiles will help choose a good payroll provider and also avoid penalties and fines for compliance failure. 

Tip 2: Choose a Payroll Provider

Paying remote workers can often be tedious because you have to manage multiple currencies, time zones, languages, and regulations. As a result, you need to choose a global payroll system that simplifies the work for you based on the location of each employee.

A good system should calculate wages, pay taxes including withholding, comply with the minimum wages of each country and provide workers benefits. 

Agencies are also available that offer human resources services; thus, they will do all the tedious work for your organization.

Tip 3: Determine Payroll Frequency

Each country has a statuary law that dictates the frequency employees receive their salaries. For instance, in some countries, the employment contract dictates when an employee is paid, while the state dictates the payment frequency in others.

Your remote teams might be located on different continents. For example, the number of rising remote employees is rising steadily. You must understand each country’s local and federal laws to know which has a national payday, two payment cycles, or one monthly payment cycle.

The employment contract also determines the payment frequency. For instance, freelancers and permanent employees are paid at different frequencies. 

Tip 4: Determine Payroll Deductions

Different countries have different statutory deductions based on employment type. You will be required to register with the employee’s local tax and employment agencies because deductions are paid to the country’s tax department and not the organization.

Deductions also vary depending on the type of employment. For instance, contractors have different deductions from permanent employees.

With the help of local agencies, you can determine which statutory deductions to make for each employee. Most governments are strict on payroll deductions; ensure you comply with the laws to be on the safe side. 

The Bottom Line

The future of work has taken a different turn. Most employees are now working from home, and numbers don’t lie .44% of Americans worked from home during the covid pandemic, and the numbers keep rising.

Setting up a payroll system for remote employees may be challenging. Still, there are practical tips to assist you, such as setting up employee profiles, choosing a payroll provider, determining payroll frequency, and determining payroll deductions.