Published On: Tue, Jul 31st, 2018

Global vs Domestic Payroll: Choosing the Right Approach for Your Business

There’s so much to consider when it comes to international business expansion, both at the start of the process, and along the way. One decision that must be made early on is whether to have a domestic payroll provider in each country or implement a global payroll; and there are many differences between the two.

When considering how to start a business overseas, global payrolls are often the best option, in order to have a clearly communicated payroll strategy for every employee, across every country. For absolutely every company, paying employees accurately and on time is crucial; done incorrectly, it can completely undo any work the company has put into employee morale and motivation.

photo/Gerd Altmann

In addition, the requirements of your payroll will depend on which country your employees live and work in, and this differs massively from country to country. This means you won’t be able to easily navigate the payrolls of an international company’s home country employees and international employees.

Here are some of the main differences between a domestic and global payroll:

Laws and government regulations

When it comes to payroll regulations concerning taxes, paid leave and holiday and healthcare benefits, no two countries will be exactly the same. Each and every country must be considered unique when it comes to approaching each payroll.

Likewise, many countries have different laws regarding how often employees should be paid, and this can vary according to the number of hours worked. Either a domestic or a global provider should ensure your payroll is compliant in each country. However an international payroll provider can give you regular multi-country updates on compliance changes. This will make the process of getting to grips with global compliance easier for your payroll team.


International payroll providers have additional capabilities for leveraging technological developments, such as automation, to iron out kinks that would otherwise have taken up the time of employees. For example, if you have a single HR system for all your international employees, an international provider can develop a single interface to feed all your global payrolls. This takes time to develop but will result in major time savings for your employees. The implementation of standardisation across every country your business operates from is a key advantage of global payrolls, and one of the key things to consider when looking at how to expand business.


There are also hidden impacts on procurement. With an international payroll provider, you only need to arrange one vendor contract to cover all your overseas payrolls. You may also find it easier to negotiate your internal standard vendor terms and conditions, such as anti-bribery compliance, with a larger and more sophisticated supplier. Plus you will have more bargaining leverage when you add all your current and potential future business. On the other hand, it can be simpler and less complex to arrange a local country contract with a single domestic provider.

If you’re looking at how to start a business overseas,it might be beneficial to consult international expansion experts, such as Galvin International, for advice on international payroll providers, or advice on logistics and operations.

Author: Sam Cohen

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