IPS is at your side as a Professional Employer Organization (PEO) for your international expansion.

Global Payroll Services for companies of all sizes

Whether your company has just a handful of employees or thousands spread around the world: As a Professional Employer Organisation, IPS offers you complete, standardised payroll services in however many countries with however many employees you operate. Our clients include SMEs as well as large corporations – we will be happy to provide you with our references.

What does global payroll cover?

Payroll includes the monthly calculation of employee remuneration, the withholding of correct income and social security contributions, the administration of bonuses, commissions, expenses and social benefits, and the delivery of payroll to employees. The service also includes keeping the personnel file, paying taxes to (tax) authorities and insurers, and checking the working hours and holidays of the staff.

Global payroll may look like the same process that is carried out in virtually every single country, but it is of course much more complex behind the scenes. Tax and labour laws vary greatly from country to country. Managing the personnel data, the many calculations and expense reports to be tracked in different languages and different currencies is often quite a challenge!

With global payroll, salary from all over the world is consolidated in one place, the data is standardised and payments are calculated and paid out worldwide in the respective national currency in compliance with legal requirements.

The multi-country-payroll

The definition of a multi-country-payroll is the same whether a company has its own branch in the country where it hires employees, whether it works through an Employer of Record (EoR) (also known as an international PEO), or whether it hires independent contractors. The difference between a global payroll and a local payroll is that the required payroll steps for different countries can be done at the same time, which makes hiring and paying employees abroad much easier and clearer for all HR departments at headquarters.

Working with a PEO – the best option

An international Professional Employer Organisation like IPS by HRsolution is the best option for a successful expansion of your company abroad. We offer you tailor-made services, from complete HR administration and legally compliant contracts to global payroll.

Good for your business

A professional employer organisation (PEO) can help your business in a number of ways. First of all, working with IPS means that you can focus on your business priorities as you expand internationally. The more your company grows, the more you need to take care of your human resources department. You need to hire additional staff, and that means additional work. Not only that, but while you may have the budget to hire new staff directly responsible for international business development, you may not have the budget to hire an experienced HR team. By working with a Professional Employer Organisation, you benefit from all the advantages of an internal HR department without having to build or hire one yourself.

Your company remains compliant with the law

Employee-related laws are complex and constantly changing in every country. Only an expert or professional with a lot of experience is able to keep up with the regularly changing legal compliance requirements. When you work with a professional employer organisation like IPS by HRsolution, you can be sure that your company is compliant with the very latest changes in employer regulations without having to worry about keeping track of legislative changes yourself.

Benefit from experience without investing in your own HR staff.

Experienced HR professionals are an expensive investment, but one you can’t do without. By working with a Professional Employer Organisation (PEO) like IPS, your company gains access to top HR professionals and highly skilled lawyers who can help mitigate employment-related risks and provide your company with better people management than you could otherwise afford.

PEOs and other categories of HR outsourcing

A Professional Employer Organisation is a form of HR outsourcing. PEOs are differentiated from human capital management (HCM) software providers that offer tools for managing employee data and payroll, but do not take over employer duties. Professional employer organisations are also different from from employee leasing companies that do not offer the additional HR services beyond handling payroll and benefits.

HR issues abroad are complex, and so many small, medium and large companies choose to invest in outsourcing HR. Instead of spending thousands of euros to hire and set up an HR department in another country and spending a lot of time learning about legal and insurance issues, these companies benefit from qualified outsourced staff hired by a Professional Employer Organisation who is well versed in all local issues.

Relieve the burden on your own HR department

If you are a company with an existing HR department, you may not realise that outsourcing your international human resources could be a perfect solution for you. Many HR departments are understaffed and have a huge workload to manage. If you can’t afford to hire more full-time or part-time staff, but still need to handle important HR tasks, working with a Professional Employer Organisation (PEO) is the perfect solution. You benefit from cost-efficient, highly qualified employees and your existing HR team can focus on completing their tasks without being exposed to overload.

Benefit from the economies of scale of a PEO

Various insurances have to be taken out for new employees abroad. A global Professional Employer Organisation can often offer more cost-effective compulsory benefits than a single company due to economies of scale.

When you need support with recruiting abroad

 Finding qualified employees with specific expertise in foreign markets is rarely an easy task. If you need temporary support in recruiting and onboarding new team members, IPS is there to help you. Of course, we also take care of all the necessary steps related to payroll and handle all issues concerning social security contributions, special benefits and taxes. You do not need to hire your own staff for this task. By outsourcing personnel tasks, you can rely on qualified employees and partners of IPS as a Professional Employer Organisation who will take care of your specific requirements.

What can you expect with new employees abroad?

Labour law and tax requirements:

Labour and tax laws differ not only from country to country, but also from person to person. The tax rate of each employee depends on numerous factors, including salary structure, age and marital status. In addition, laws are always subject to change – changes in legislation occur without warning. Languages and currencies vary from country to country, as do standards for bonus payments. In many countries, employers must pay a 13th month salary as a bonus.

Data collection

The amount of data that needs to be collected and processed in an international payroll operation can be overwhelming. Each department at each location needs to provide time and attendance reports, expense reports and bonus and commission figures. Income can change each month, so the tax rate may be different. Benefit packages also need to be calculated. In addition, there are variable costs to be calculated such as expenses and commission payments to sales staff, thirteenth month salaries, annual bonuses and much more.

Complex reporting due to country-specific differences

Payroll records for a company’s entire global workforce – its own staff as well as employees hired through the Employer of Record (EoR) – are typically spread across numerous systems, spreadsheets and locations. If a company has employees in 10 countries, it may have up to 10 local payroll partners to ensure compliance in each of those countries.  All these records are then separated from each other and stored in their own format, language and currency.

If a CFO or controlling wants to get an overview of total global personnel expenses, or even just compare the costs of two or more locations, payroll data must be retrieved from each source, the format standardised and currencies converted – a process that can take weeks.

Ensure data security

Data management and data security are inseparable. All payroll and payment processing must be handled with the utmost care in terms of data protection and security. Payroll data contains highly sensitive personal data that is protected by global standards such as GDPR in Europe and CCPA in the US and carries heavy penalties for data breaches. Payroll data is a desirable target for cyber criminals and requires the highest standards of data security and constant vigilance against future threats. IPS and its partner network keep these requirements in mind at all times and exercise the utmost care.

Which payroll is most suitable?

Employment models

The process of global expansion starts with determining the right employment model for the project. The three main employment categories are working with an EoR, in-house payroll and the contractor model. If a company wants to enter a market as quickly as possible, an Employer of Record (EoR) allows it to pay its employees in full compliance with legal and regulatory requirements without having to set up its own permanent establishment. The workforce hired through an EoR can be supplemented by contractors for tasks that can be implemented independently.

If the company plans a long-term presence abroad, it can set up a company from the get-go, which can however take several months. In the meantime, it can hire through an EoR and switch to regular payroll once the new permanent establishment is set up – and if the global payroll provider offers both, it is an easy step.  

Set-up a permanent establishment – yes or no?

Once a strategic decision has been made to enter a foreign market, the question arises whether to set up a foreign subsidiary or an overseas branch, or hire through a different model. The number of employees a company plans to hire abroad also influences the decision regarding the set-up. Usually, a workforce of 15 to 20 employees is sufficient to justify a shift from the EoR solution to payroll. Companies are then established enough to negotiate more comprehensive contracts with their local staff.

Cooperation models for global payroll services

If a company is considering switching from a decentralised manual payroll system to a unified global payroll system, it is important to ensure that the global payroll provider can process all employment types that the company is most likely to use.  One collaborative model for companies to use in this regard is the aggregator model, such as the one offered by IPS. Here, the commissioning company enters into partnerships with at least one local company, the so-called in-country partner, which carries out the payroll – usually accounting firms or law firms. The in-country partner (ICP) is hand-picked and carefully vetted by us – essential when dealing with sensitive issues such as compliance and tax and labour law. The aggregate model also allows for maximum flexibility. If a company has a specific need, it can be matched with the right ICP.

Salary levels for employees abroad

One of the most difficult aspects of recruiting staff around the world is determining the optimal salaries. If salary offers are too low, the company is unlikely to attract the best talent. If the offers are too high, too much will be paid unnecessarily, reducing the return on investment. Again, savvy local partners are best placed to negotiate optimal salary levels for new employees. IPS by HRsolution offers you this service for more than 120 countries worldwide.

Continuous support in achieving your global expansion goals:

As your partner, we want to know your story and your ambitions.

We want to help you achieve your goals and to support new developments in your business as well as in the world so that your business thrives.