Payroll is one of those thankless jobs, right? A job nobody notices until payday arrives and hiccups occur—like delayed deposits, incorrect payments, and miscalculated taxes. 

Suddenly everyone’s scrambling to find out why their hard-earned money isn’t where or what it should be. The peace of mind that comes with a regular paycheck vanishes in an instant, replaced by worry and frustration over how they’ll manage.

These mishaps are even more likely when dealing with a global workforce. Different currencies, varying tax laws, and international compliance standards add layers of complexity.

However, with the right strategies in place, global payroll can become a seamless and efficient process.

In this article, we’ll share 12 best practices to help you overcome the challenges of managing cross-border payroll in 2024.

Challenges in Managing Global Payroll 

#1 Data discrepancies and errors

When managing payroll across multiple countries, each with its own systems and data formats, ensuring consistency and accuracy becomes complex. Data discrepancies often arise from differences in how data is collected, stored, and processed across various regions. For instance, varying tax regulations and currency formats can lead to errors if not properly aligned.  

The problem increases when data from different payroll providers needs to be entered manually into the central HCM and accounting systems. One tiny mistake, like an extra zero or a misplaced comma, can lead to major payroll errors. Not only does this mess up paychecks, but it also impacts the organization’s financial health and violates employment laws.

#2 Compliance complexities

According to the Getting the World Paid 2024 survey, around 63% of the respondents mentioned that compliance is their biggest global payroll challenge. The intricate web of labor laws, tax regulations, and reporting requirements of each country can make even the most seasoned HR professional’s head spin! 

For example, in the UK, under the Maternity and Parental Leave policies, eligible employees are entitled to up to 52 weeks of maternity leave, while in the U.S. the leaves are shorter - up to 12 weeks of unpaid maternity leave under the Family and Medical Leave Act (FLMA) for childbirth and newborn care. Staying updated with the evolving regulations in each operating country is crucial to avoid global payroll compliance risks. 

#3 System integration issues

Managing payroll across multiple countries often necessitates working with multiple payroll partners. According to the 2024 “Getting the World Paid” survey, 44% of companies with global operations work with 2 to 5 payroll partners. 

Creating a cohesive and functional system requires considerable time, resources, and technical expertise. Moreover, integrating diverse payroll systems and technologies across countries can be challenging because of compatibility and data synchronization problems. 

Misalignment between the systems leads to delays, data discrepancies and increased administrative overhead.

#4 Security concerns

Employees working worldwide, rank security as the most important element associated with pay. Employee payroll data is very sensitive and includes personal information, bank details, and salary records. A security breach in the system leads to identity theft, and financial loss, reputational damage and creates mistrust among employees.  

Each country has its own guidelines on how to store, protect, and handle sensitive employee information. For example, in the UK, you must follow data-compliance regulations as per the General Data Protection Regulation (GDPR), while in India employers must follow the Digital Personal Data Protection Act 2023 (DPDP Act). 

Navigating these regulations requires a thorough understanding of international security standards and laws, which adds another layer of complexity 

#5 Late or inaccurate payments

Inaccurate payments can manifest in the form of overpayment or underpayment, both of which have their own set of complications. Delayed salaries significantly impact employees' morale, productivity, and financial stability, leading to increased stress and potential turnover. For clients, it disrupts trust and satisfaction, potentially affecting long-term business relationships. Timely payments are crucial for maintaining a motivated workforce and ensuring client confidence.

Late or inaccurate payments not only lead to legal and financial risks for the company but also negatively impact employee morale and your company’s reputation. 

Best Practices to Make Your Global Payroll Accurate and Compliant

Let’s explore some of the best payroll best practices you can implement in 2024 to improve your team’s payroll performance. 

#1 Create payroll policies and procedures for the entire payroll system

The foundation of any good process—especially one as complex as payroll—are the procedures and policies. Start by outlining who does what, when, and how in your payroll process. Make sure everyone knows their role. Equip your team with training on payroll cycles, termination or retirement payouts. Ensure your employees follow compliance and adhere to local labor policies and laws. This helps your payroll process run smoothly and ensures your entire payroll team is on the same page. 

Some of the important things that your payroll policies and procedures must define are:

• Components of payroll
• Payment schedules, methods, and processes
• Payroll deductions
• Compensation and benefits
• Data entry processes
• Report handling standards
• Record keeping processes
• Pre and post-payroll processes

#2 Compile a list of critical deadlines for payroll processing for the year

Effective global payroll management hinges on staying ahead of crucial dates and deadlines in different countries. Maintain a comprehensive calendar of the important deadlines, so you don’t miss out on any. This helps you to strategically plan your payroll processing and avoid heavy fines and non-compliance risks.

Some of the important deadline dates to note are:

• Paydays (weekly, bi-weekly, bi-monthly, or monthly)
• Non-operational dates/holidays for local banks
• Tax filing deadlines
• Employee benefits enrollment periods
• Federal reserve closed dates

#3 Set up notifications for deadlines

With many business operations running simultaneously, the possibility of forgetting critical deadlines is high. So, set up notifications to ensure you don’t miss the dates to file and submit your returns. 

Here are a few ways to go about this:

• Select appropriate channels for notifications, such as email alerts, calendar reminders, and task management tools. 
• Create a payroll calendar in your team’s calendar, and invite all the members involved in the payroll team to the event deadlines throughout the year.
• Automate the notification process through a payroll system or task management software that integrates well with your in-house HR systems.

#4 Ensure the correct classification of your workers

Proper classification of employees and independent contractors is important to collect and file the right forms, pay them correctly and provide them with the benefits they are entitled to. 

Employees typically work under the direction of the employer and are entitled to benefits like health insurance, social security, retirement plans, paid time off, and overtime pay. On the other hand, independent contractors are responsible for their own tools, schedules and tax filings. The hiring company does not withhold taxes or provide benefits.

Misclassifying employees as independent contractors can deny them access to crucial benefits and protections. This not only impacts the workers' financial and physical well-being but also exposes the company to legal risks and penalties. To avoid these issues, regularly review worker classifications, particularly when job roles or conditions change. 

Classify employees and contractors correctly with Gloroots employee misclassification calculator.

#5 Automate your payroll system

One of the biggest advancements in human resources software is global payroll automation, which ensures efficiency, accuracy, and compliance with regulatory standards. Automating the entire payroll process from data entry to distribution not only frees up the workload for your payroll team but also significantly reduces the risk of errors and enhances operational productivity. 

Payroll automation can take over some crucial tasks such as:

• Calculating wages, taxes, and deductions
• Calculating overtime, bonuses, and raises
• Payroll reporting and cost breakdowns
• Tax filing and reporting
• Currency conversions
• Compliance with tax laws and labor regulations

Read: A Complete Guide to Global Payroll Automation

#6 Use real-time data tracking and analysis

Whether you’re reviewing an employee’s payroll information or a cost breakdown of your social security contributions, you need an up-to-date report to make informed decisions. Using real-time data analysis, you can:

• Monitor key payroll metrics
• Promptly identify and rectify payroll discrepancies
• Identify payroll patterns in your company across departments. 

This enables proactive management of payroll expenses such as budget forecasting, optimizing staffing levels, or adjusting compensation strategies to align with business goals.

Gloroots’ real-time reporting feature provides instant access to your global payroll data, enabling you to make informed data-driven decisions.

#7 Create a strict payroll approval process

A robust payroll approval process can minimize errors and ensure accurate payroll processing. How do you go about this?

1. Start by creating clear guidelines for each step in the payroll process. This includes the budget, schedules, pay periods, and other limitations.
2. Implement a multi-tiered approval system that requires approval at various stages. This includes managers, the finance team, the payroll team, supervisors, etc. 
3. Implement automated workflows to streamline approvals and reduce manual errors. 

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Establish a system where every approver thoroughly reviews the payroll data for any discrepancies, and checks compliance with labor laws and the accuracy of calculations. Conduct regular audits to review the entire payroll process and address inconsistencies, if any.  

#8 Offer more accessible payroll options

Global employees expect timely and convenient access to their earning. To meet this demand, consider flexible payment options like direct deposit. According to the American Payroll Association, 95% of employees receive paychecks via direct deposit. It is considered to be one of the easiest, hassle-free payment options as the money gets deposited directly to the employee’s bank account. 

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Additionally, companies should consider digital payroll solutions, such as mobile wallets, prepaid cards, or even cryptocurrency payments. Use Gloroots crypto payroll software to offer a variety of crypto payment options for your employees. 

#9 Opt for a software solution with mobile self-service

Use software with mobile self-service capabilities that take care of certain repetitive tasks from their smartphones or tablets. This includes tasks like logging in and out of employees, automatic uploading of the payslips, and submission of tax information. Self-service relieves your HR team’s workload, allowing them to focus on the core initiatives. 

Make sure you choose a payroll system that has an employee self-service portal that is mobile-friendly. This functionality helps employees to view pay stubs, tax documents, and benefits details and manage direct deposits anytime, anywhere. It reduces reliance on traditional methods and facilitates quicker resolution of payroll inquiries, enhancing overall efficiency.

#10 Implement a strong data protection policy

As an organization, protecting your employees’ payroll data must be one of your top priorities, whether you are outsourcing to a payroll partner or handling it in-house with payroll software. Take the following measures to ensure sensitive data is protected:

• Establish strict access controls to ensure that only authorized personnel can access and manage this data.
• Implement comprehensive data encryption methods, both in transit and at rest, to protect data from being intercepted or accessed by unauthorized parties. 
• If you choose a third-party payroll services provider, then you must have a data processing agreement in place to ensure there is no data misuse.

#11 Outsource your payroll to an expert global payroll service provider

When your team has expanded to different regions or when your internal payroll team cannot manage alone, outsourcing payroll is the most effective payroll management solution. An expert payroll services provider will implement the best global payroll practices and use advanced technology to streamline your payroll processing. If your company has a global expansion plan by hiring employees internationally, then it’s time to consider outsourcing payroll providers. Some of the benefits of outsourcing your payroll tasks are

• Access to expertise
• Time savings
• 100% compliance
• Error-free timely payroll process
• Improved employee experience
• Reduced costs
• Increased data security

#12 Ask for feedback from your employees

Employees are the major stakeholders impacted by your payroll process, making their input valuable for continuous improvement. By understanding their perspectives, you can identify pain points, streamline operations, and make necessary adjustments. 

Here are a few questions to ask:

• How satisfied are you with your paycheck accuracy?
• How easy is it for you to access your payroll information (e.g., pay stubs, tax forms)?
• Have you ever encountered any issues with your payroll?
• What improvements would you like to see in our payroll process?

Involving them in the process shows that you value them and are committed to making their work life better. 

Go Global with Gloroots!

Why tire yourself out trying to perfect your payroll practices?

Whether you're handling diverse regulations, managing multi-currency transactions, or simply seeking efficiency, Gloroots is here to support your international expansion journey with precision and compliance.

Streamlined Operations: Gloroots global payroll software simplifies managing payroll across borders, integrating everything into one easy-to-use interface.

Real-Time Insights: Access and analyze payroll data across countries for smarter decision making.

100% Compliance: Gloroots ensures that your payroll always stays on the right side of the law.

Multi-Currency Payroll: Gloroots handles multi-currency conversions and transactions smoothly, making global payments a breeze.

‍Ready to simplify your global payroll journey? Let Gloroots show you how it's done. Speak to our experts today and discover how easy international payroll management can be.