What is International payroll?

International payroll

International payroll is the periodic payment of salaries to people employed in countries other than the company's, with each jurisdiction's withholdings and contributions. It requires a local entity or an Employer of Record acting as the legal employer in the worker's country.

Paying someone abroad is not a money transfer: it is correctly applying that country's withholding tax, social contributions and reporting duties. When a company proposes paying a foreign employee by bank transfer with no local structure, it is usually shifting the risk onto the worker.

Also called: global payroll, cross-border payroll

Related terms

Employer of RecordAn Employer of Record is a company that legally employs a worker in their own country on behalf of another, foreign company. It takes on payroll, social contributions and local labour compliance, while day-to-day work is directed by the client company. It allows hiring in a country without opening a subsidiary there.
Total compensationTotal compensation is the complete package of an international remote role: base salary, variable pay, equity, learning and equipment budgets, time off and health cover. Comparing base salary alone across countries leads to the wrong conclusion almost every time.
Multi-currency accountA multi-currency account lets you receive, hold and convert money in several currencies within the same account, with local banking details in different countries. It avoids every international payment going through a conversion with a hidden margin, which is where much of the income is lost when invoicing abroad.