Global Payroll Becoming Increasingly More Complex

Global Payroll Becoming Increasingly More Complex

Ask a typical small business owner why his or her company outsources payroll and you are likely to hear at least something about how payroll in the U.S. has become too complex to handle in-house. That much is true. Yet the difficulties the average small business faces pales in comparison to those faced by larger companies with global operations. Global payroll is exponentially more complex and becoming more so every day.

Companies with multinational employees face special challenges in meeting the myriad payroll regulations pertaining to the countries in which their employees live. Think of it like multi-state payroll problems multiplied many times over. A company with employees in more than half a dozen countries could easily find itself overwhelmed in trying to keep up with it all. Even experienced payroll providers can have trouble.

Payroll Is Constantly Evolving

The fuel that continues to fan the flames of global payroll complexity are the many regulations that keep changing. As one example, consider a new apprenticeship program that just took effect in the UK. In order to fund the program, an apprenticeship levy was assessed beginning in April. It is only assessed on employers with annual payrolls in excess of £3.9 million.

The levy is obviously not a big deal to government officials and those who will benefit from the apprenticeship program. And if it were the only levy assessed by the UK government, it wouldn’t be a big deal. But it’s not. It is yet another levy in a lengthy list of others that add multiple layers of complexity to payroll every time a new one is added.

New levies are not the only source of frustration for global payroll providers. In Canada, payroll providers face continual headaches trying to track updates to both national laws and provincial and territorial regulations. Their efforts are hampered by the fact that multiple languages are spoken throughout the country.

In Australia, the big challenge is avoiding innocent mistakes that could easily end up costing companies millions. To say that Australia’s government does not look too kindly on payroll mistakes is to state the obvious.

The reality is that the payroll universe is one that is constantly evolving. Any company that finds keeping up with domestic payroll challenging is going to find global payroll a lot more so. Perhaps that’s why so many companies are now turning to third-party payroll companies like Dallas-based BenefitMall.

Payroll Is What They Do

Outsourced payroll has been around since the 1970s. However, it did not really come into its own until the mid-to-late 1980s. Today, payroll has become a highly specialized industry that now finds itself indispensable both here and abroad.

Why would a company outsource its payroll to an enterprise like Benefit Mall? Because payroll is what Benefit Mall does. They do not manufacture widgets or offer marketing services. They are not staffing recruiters, network deployment specialists, or healthcare professionals. They are payroll providers who specialize in all things payroll.

The obvious benefit of outsourcing payroll is that it allows the payroll specialist to do what it does best so that the employer can focus on its core products and services. In light of that, it is interesting how many businesses maintain in-house payroll departments even though doing so does not line up with the underlying principles of their own businesses.

Perhaps more companies will consider outsourcing as payroll becomes more complex. It’s already complex enough here in the U.S., and things aren’t any better globally. That complexity only looks to get worse with each passing year. How long before every company on the planet is outsourcing payroll?