Recognizing and Managing Through Global Payroll Challenges
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The document discusses the complexities and challenges of managing global payroll operations, emphasizing the need for effective coordination of payroll across multiple countries to ensure compliance and smooth workforce management. It outlines various operational models, best practices, and the required skills and competencies for managing global payroll. Additionally, it highlights the importance of technology and vendor management in overcoming logistical challenges and meeting reporting requirements.
Recognizing and Managing Through Global Payroll Challenges
- 1. Recognizing and Managing Through Global Payroll Challenges Presented to: APA San Francisco Chapter Date: August 17, 2018 Presented by: Dave Leboff, President, US Operations Immedis, Inc.
- 3. International Payroll Solutions Fully managed global payroll services Worldwide payroll calculations Multiple jurisdiction service Payslips for all employees Choice of payment frequencies Tax and social security deductions calculation and advice Coordination of tax and social security payments Employer wage tax return reports and submission Updates on rate changes for pensions and social security contributions Delivery of net pay into the employees bank accounts Remittance of tax to local authorities Year-end documentation supplied to employees Advice on relocation costs and subsistence payments
- 4. 1. Overview 2. Definition 3. Complexities & Challenges 4. Organization Attributes 5. Basic Structural Model 6. Model Variations 7. Choosing the Right Model for Your Company 8. Expatiates/Locals 9. Best Practices 10. Questions Agenda
- 6. Global Payroll Overview In 2016 the US engaged in almost $5Trillion of Global Import and Export activity Global payroll operations are central to effective international workforce management, a key to keeping worldwide business engines running smoothly
- 8. Global Payroll Overview Global payroll administration is the sum of all activity required to coordinate and manage the operation of payrolls in more than one country for a single employer. Global payroll administration includes: Collection and distribution of data required to calculate payroll (earnings, deductions, net pay, tax liabilities) Completion and filing of employee and employer compliance Remittance of funds to statutory authorities Delivery of net pay to employees Accounting and management information reporting Compliant operation with global regulatory frame
- 9. Global Payroll Overview Global ERP (Global Programs, Management Reporting, Accounting, Analysis) Country 3 ICP Gross- to-Net Payroll Processing Country 2 ICP Gross- to-Net Payroll Processing Country 1 ICP Gross- to-Net Payroll Processing Global, Regional, Updates Local Compliance Employee Payslips Local Management Reports Local Accounting Reports Payroll Data Sources Payroll Processing Payroll Driven Reporting Local National Updates Local National Updates Local National Updates
- 10. Global Payroll Complexities and Challenges
- 11. Complexities and Challenges Some of the critical challenges that managers of global payroll operations must contend with Keeping up with Local Payroll Law Changes Accurate, Timely Payroll Reporting Vendor Selection and Management Technology Funds Management (net Pay, Tax Remittance) Training for Staff Meaningful Performance Measures/KPIs Accurate Timely Management Reporting (accounting, other) Governance Working Knowledge of Global Regulatory Framework (GDPR, FCPA, Anti-terrorist, Anti- money laundering)
- 14. Global Payroll Basic Structural Model
- 15. Global Payroll Operations Structure COUNTRY A PAYROLL PROCESSING COUNTRY B PAYROLL PROCESSING COUNTRY C PAYROLL PROCESSING GLOBAL PAYROLL PROGRAM MANAGEMENT Governance PEO
- 17. Global Payroll Program Governance Decide program management model Approve program budgets Approve relevant policies Mobility Employee vs contractor Tax and legal opinions Approve accounting protocols Execute contracts Outsourcing BPO Aggregator ICP Technology Approve performance standards Approve treasury strategies
- 18. Global Payroll Program Management Conducting the Payroll Orchestra
- 19. Global Payroll Program Management Seat on governance team Monitor/measure program performance Compliance with privacy framework Vendor sourcing and management Global data management and reporting Integration of global and local technology platforms Local compliance oversight Key role hires Ensure effective allocation of roles and responsibilities Ensure right skills and competencies are in place Expatriate program and policies integration Net pay strategies/delivery for expatriates Seat on new country implementation team Non-local compensation and benefits updates
- 20. Payroll Program Management: Skills and Competencies Program management Vendor management Global technologies Foreign exchange Culture Country registrations Tax treaties Basics of international employment law Expatriate policies Expatriate-related law Section 911 RAs vs. NRAs Special rules for certain visas Privacy/GDPR OFAC AML If your global payroll team lacks any of these skills or competencies, your choice is to train or outsource
- 22. Responsibilities of In-Country Processing Operation Compensation/ benefit updates Joiners/leavers Gross-to-net calculations Tax remittances Local compliance Net pay Expatriate processing Payslips Integration with global systems/processes
- 24. Global Payroll Operating Model Alternatives: Program Management Remains Fully Internal In-Country Processing In-Country Processing Program Management PEO Governance
- 25. Global Payroll Operating Model Alternatives: Aggregator or Regional Processor Program Management In-Country Processing PEO In-Country Processing PEO In-Country Processing In-Country Processing Aggregator or Regional Processor Governance
- 26. Global Payroll Operating Model Alternatives: Business Process Outsourcer COUNTRY A PAYROLL PROCESSING COUNTRY B PAYROLL PROCESSING COUNTRY C PAYROLL PROCESSING BPO Program Management Governance
- 27. Global Payroll Choosing a Model that Works for Your Organization
- 28. Global Payroll Operating Model Alternatives: Relevant Attributes Some relevant attributes to consider: Maturity of global payroll program Size of organization Centralized/decentralized Functional/regional Shared services Number of locations Volume of employees outside US/in each location Availability of fit-for-purpose technology Availability/capability of resources Inclination to outsource (generally or, specifically, payroll)
- 29. Responsibilities of In-Country Processing Operation New to Global Multiple service providers and technologies Uneven resource quality country to country Difficult to gather credible data and consolidate Growing & Gaining Experience Maturing governance Global program management evolving Reporting requirements set Payroll process aggregation Mature Functioning governance Global service standards Shared services, BPO, selected managed payroll services Global systems integration Business intelligence and full reporting
- 30. Global Payroll Locals Versus Expats
- 31. Local National Payroll Local Employment Law CultureDifferent Fiscal Year Ends Pay FrequenciesLanguage Social Security & otherTaxes Compliance Requirements CurrencyEquity Reporting
- 32. Expatriate Payroll 2 Reporting Jurisdictions Culture Expat Policies andTax Equalization Inconsistent Pay Frequencies Language Certificates of Coverage Compliance Requirements Multiple Currencies Equity Reporting
- 33. Global Payroll Outsourcing & Technology
- 34. Reporting and Analytics Integration Data Validation Process Automation Information Security What Global Payroll Technology Should Do for You Global Information Risk Management
- 36. Best Practices Gain international payroll competencies Join GPMI Train up Network with peers Take your seat on the governance team Find strong vendor partners and technologies
- 37. Questions?
Editor's Notes
- #17: Decide program management model Approve program budgets Approve relevant policies Mobility Employee vs contractor Tax and legal opinionsApprove accounting protocols Execute contracts Outsourcing BPO Aggregator ICP Technology Approve performance standards Approve treasury strategies
- #19: Seat on governance team Monitor/measure program performance Compliance with privacy framework (GDPR) Vendor sourcing and management Global data management and reporting Integration technology platforms Local compliance oversight Key role hires Allocation of roles and responsibilities Ensure right skills and competencies are in place Expat program and policies integration Net pay strategies/ delivery for expatriates Seat on new country implementation team Non-local compensation and benefits updates Skills and Competencies Program management Vendor management Global technologies Foreign exchange Country registrations Tax treaties Basics of international employment law Expatriate policies Expatriate-related law Section 911 RAs vs. NRAs Special rules for certain visas Global compliance frames GDPR OFAC AML Culture