The ultimate payroll checklist for global payroll managers

Running a multi-country payroll involves a multitude of different payroll providers, software systems, and data transfers. The task of a global payroll manager consists in administering and synchronizing all the different providers, systems and data files to keep track of the entire global operation, while ensuring full compliance across all geographies.

What might sound pretty straightforward in theory is quite a complex and challenging task in practice. In order to successfully run payroll for a global team, global payroll managers must be aware of many different pitfalls.

We have compiled a detailed payroll checklist to help you safely navigate the challenges of global payroll management. From choosing the right payroll set-up to selecting a payroll system that meets all the requirements to conducting global payroll audits, here is what to look out for when managing payroll on an international scale.

Before we dive right into the different items on a global payroll manager’s payroll task list, let’s first try and understand this role a little better. In its core, the job of a global payroll manager consists in making sure that the business’s global payroll system runs smoothly and ensuring global payroll compliance.

A major part of the work is about coordinating different payroll vendors and processes. It’s basically on the global payroll manager’s desk where all the different vendors, processes and systems come together—and from where they must be managed. 

Global payroll managers oversee international payment processes, define the necessary payroll policies, coordinate the rest of the payroll team and report to the senior management to provide information about global payroll costs and data. They are further in charge of tasks such as payroll system maintenance, payroll reporting, and more.

Running a multi-country payroll requires a specific set-up that involves different in-country partners (ICPs) and payroll systems that need to be managed and coordinated. The first step on the way to efficient global payroll management therefore consists in creating a robust payroll infrastructure and establishing the necessary connections and network. Action items in this process steps include:

• Analysis of current payroll set-up and processes (including payroll providers, payroll systems, geographies, and more)

• Analysis of weaknesses, challenges and recurring problems

• Reconsideration of global payroll model (in-house, outsourced, hybrid)

• Development of payroll strategy, roadmap, OKRs and KPIs

• Definition of roles, responsibilities and accountability

• Selection of suitable payroll providers for the different geographies

• Definition of clear guidelines for in-country payroll partners regarding compliance, reporting, and more

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Global payroll comes with numerous challenges, which is why many businesses opt for a global payroll solution that centralizes all vendors, processes and data streams in a single software solution. However, it’s up to the global payroll manager to define what requirements any potential global payroll system must meet. Here are some of the most common features multinational organizations require for their multi-country payroll operations:

• Payroll integration

• Payroll automation

• System scalability

• Global employee benefits management

• Time and attendance and expense management functionalities 

• Security and compliance features

• Intuitive dashboard and rich reporting capabilities for detailed insights

• Employee self-service functions

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Global payroll managers may not be in charge of the actual payroll calculations—after all, those are normally done by the ICPs with the help of payroll software—but there are still some tasks in the different stages of payroll processing where they have to be involved to ensure everything runs smoothly. Any global payroll checklist should therefore include the following items:

• Payroll preparation: data input collection for payroll 

• Payroll reconciliation: validation of collected data input, including last-minute changes

• Payroll calculations audit: verification of payroll results and data provided by different ICPs

• Payment delivery: final approval of employee payments

• Tax assessment: connecting the different payroll components with the tax and social security obligations in each geography

• Data consolidation and internal reporting: consolidation of payroll data from different providers and systems to make it available to Accounting and Finance

• Year-end reports: payroll cost analysis for the management level to use it for financial and workforce management decisions

Payroll is subject to a myriad of rules and regulations, which is why ensuring global payroll compliance should be high up on any payroll checklist. There are numerous compliance pitfalls that span across all stages of payroll. And since compliance mistakes can quickly become very costly, global payroll managers have to be aware of various potential issues, including:

• Compliant payroll set-up and registration with all the relevant local authorities

• Compliant payment infrastructure for both employee payments and payments to statutory authorities

• Compliance with compensation laws and payroll rules regarding pay period, pay day, and more

• Statutory benefits compliance across all geographies

• Data security and compliance with important data protection regulations such as GDPR

• Payroll tax withholding and filing

• Statutory reporting: composing, verifying and submitting tax and social security reports on time

• Payroll recordkeeping

• Ongoing checks for legal changes affecting payroll in any of the payroll countries

• Preparation of summaries for audit and compliance

Download the complete checklist for global payroll managers.

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Regular payroll audits ensure that your payroll is accurate and compliant, help you keep track of your global payroll operations, and prepare your business for unexpected inspections through regulatory bodies. When auditing your global payroll, you should:

• Review employee data

• Verify data consistency across the entire payroll system

• Ensure employee and payroll records are complete and accurate

• Check payroll tax withholdings

• Review payroll-related payments to see if they match payroll calculations and reports

• Assess the overall operational efficiency of your multi-country payroll

• Report findings and address any issues immediately

• Clear out any unnecessary data

Even with the best and most detailed global payroll checklist, there is always the possibility of overlooking an important aspect or simply making a mistake when trying to bring all the different parts of the multi-country payroll operation together. In order to prevent human error or any kind of oversight that could cause severe compliance issues or payment delays, businesses should invest in a global payroll solution that automates crucial payroll processes and unifies their global payroll.

Lano’s Payroll Consolidation Platform allows you to put your global payroll operations on autopilot. Unify your payroll infrastructure and manage payroll for all countries, entities and employee types through one single platform. Centralize employee and payroll data for all geographies and from all your payroll providers in one place and gain deeper insights into your global payroll expenses thanks to rich payroll analytics features. Book a demo to speak with one of our payroll experts and see Lano’s Payroll Consolidation Platform in action.