Even for businesses that operate exclusively locally, processing payroll is a challenging task. It’s simple to initially feel overwhelmed if you’re considering employing people from around the world. Payroll outsourcing is a common practice by companies where they partner with payroll processing companies to manage the global compensation of their employees in different parts of the world. Handling global payroll can be challenging due to a number of considerations, including local benefit packages and currency exchange rates, as well as the need to take into account the cost of living. UAE has been one of the few destinations in the world that after the pandemic has welcomed people from all around the world to reside in UAE and work remotely for their local employers. This has also enabled worldwide companies to explore the options for remote work and global compensation.
What Does Global Compensation Mean?
The term “global compensation” refers to procedures for onboarding and handling payroll for foreign workers and contractors. Global compensation can involve a variety of activities, depending on the nation where the workers or contractors are employed, which consists of:
- Calculation of Wages
- Settlement of Taxes
- Disbursement of Pay Slips
- Compliance with Labor Laws etc.
Read More : Global Employment Visa Outsourcing Dubai, UAE.
How to Manage Global Compensation?
Businesses which are new to the concept of Global compensation must first understand that managing the global payroll of their workforce in different parts of the world may sound a hassle but is actually not. For managing a global payroll, there are three common practices that are chosen by the companies according to the suitability and requirements of their business. These methods are:
- Employer of Record or EOR
- Professional Employer Organization or PEO
- In-House Payroll Management
Employer of Record or EOR – With the help of an employer of record service, a chosen business can handle all aspects of your payroll in another nation. International employees can be hired without having to establish a legal business in each country thanks to EORs. They are, technically speaking, the employer of your foreign employees. An employer of record can assist with managing the recruiting process and legalities in addition to continuous payroll management.
Professional Employer Organization or PEO – PEO serves as your HR, somewhat like the EOR. You must own your legal company in the nation or region if you choose to employ a PEO, nevertheless. When you work with a PEO, you and another provider will be in a co-employment arrangement. The employee is simultaneously employed by both of you, and your PEO handles all HR-related tasks on your behalf.
In-House Payroll Management – If you have the time and resources, you can manage compliance in-house and manage global payroll as well. Make sure you can before choosing this strategy so that you can:
- Create legal entities in any nation where you have employees.
- Centralize and keep an eye on the payroll process Have enough local legal counsel
- Having connections to regional benefits administrators
- Recognize the regional differences in payroll, benefits, and taxes
Which Global Payroll Solutions Work Best for Business in UAE?
Every business has a distinctive workforce model which also makes payroll management unique for them. There is no standard answer to which global payroll solution is best for all businesses but keeping the features and offerings of each solution into consideration, companies can simplify their decision on choosing the most suitable solution. In UAE, labor laws are updated every now and then which creates a big hassle for foreign business owners to maintain compliance on their own. Running a business in Dubai as a foreigner without government involvement is almost impossible which is why companies in UAE usually partner with local HR outsourcing and payroll outsourcing firms. This enables businesses to keep themselves relieved from the stress of law compliance, tax settlement, wage laws, and other employment-related factors which are controlled by government bodies.
Whether companies choose PEO or EOR, they must assure that they are getting valuable services through the investment of partnership. However, establishing a local entity for in-house payroll management will undeniably take extra cost, time, and energy.
Read More : Importance of Global HR Outsourcing & Practices.
Looking for a Holistic Payroll Outsourcing Company for Global Payroll Solutions in Dubai?
Partnering with Payroll Middle East gives you the ultimate satisfaction in all kinds of global payroll solutions for your business in Dubai and the entire Middle East region. With the continuous transition of the work models throughout the world in the present times, handling remote work and global compensation for your employees could be a challenge if not managed accordingly. We at Payroll Middle East have a vision and purpose to serve our clients with the greatest deal of payroll outsourcing making sure that your global team is entirely in compliance with the local labor regulations and global compensation standards. If you are looking for an all-inclusive company to cater a partnership for global payroll solutions with you, call us today and learn more about our services.
Anu Thomas has over 5 years of Payroll experience under her belt and deals with many aspects of Payroll management. She continues to develop her knowledge of the latest payroll legislation to best support clients.