Paying an employee working overseas is a little more complex than those working on home soil.
You need to be aware of various requirements and employment laws, which is further complicated by the fact that each country has its own unique versions of these.
We asked our experts to compile the information below, which should tell you everything you need to know.
What counts as an overseas employee?
An overseas employee can be anyone sent abroad on behalf of a company to oversee a project, or a contractor living in their own country hired to work on a project by a business from elsewhere in the world.
Using contractors from abroad is definitely an easy solution for many business owners, as it helps avoid the issues surrounding international payroll.
However, it’s not that straightforward. It can create potential issues with misclassification, where the country can actually view them as your employee, therefore creating potential liability. This is a headache waiting to happen.
Deciding the best method
As mentioned above, there are many factors to consider when deciding on how you will pay employees overseas.
If the employee is sent overseas for just a short assignment or project, then it’s possible to keep them on home payroll. There are countries that allow this, along with special rules for remote payment that include a type of registration which doesn’t require any legal involvement.
On the other hand, rules change if you’ve hired someone local to that country, as they would need to be on their home payroll in order to meet tax and social security requirements.
Expats are slightly different because you will have to handle two separate tax systems if they’re staying abroad for a significant period of time and become tax residents.
If this all sounds a bit overwhelming, then not to worry, this is where we as an umbrella company come in to save the day.
By choosing our Global Management team as your payroll provider, we relieve you of those headaches and stresses.
Our service includes:
- Registering overseas contractors.
- Ensuring full tax compliance
- Providing a cost-effective management service