New International Payroll Series
PART 1

New Payroll Expectations!
Make sure your payroll is in line with new legislation.

Rose McCarter-Field

By Rose McCarter-Field

Did you know that today’s international mode of working is changing tax laws? And that companies are becoming increasingly liable for ensuring correct tax payments, in every country in which their staff operate?

If you have staff in multiple countries, on different types of contracts this can be a mine field.

Since the introduction of IR35 in the UK, other countries have been reviewing how they collect income tax. This includes clamping down on the employment status definitions of residents. It also includes how individuals are paying income tax and who they are paying it to. The trouble is, it’s difficult for governments to track the tax status and payments of every single person. As a result, the onus is being placed on the company. The company is becoming increasingly responsible for correct income tax payments and employment status allocation, for every country in which their staff reside.

This means companies need to get savvy to international employment law. Companies need to fully understand the legal framework for assigning employment status, in every country that their staff are working from. They need to ensure correct tax payments in each of these countries too. In some cases, this may be tax payments to more than one country for one person.

The complexity of this changing legislation is not an easy task if you have 100 staff in Germany, 2 in Spain, 1 in Japan, and so on.

This change will no doubt effect the mobility of the modern workplace, especially for anyone wanting to live in two countries. For instance if someone usually resides in the UK but plans to work from their home in a sunnier country for a few months, the company needs to know details. They need to know how long that person can be in each country before their tax status changes and alter any payments accordingly.

Companies such as GSK have already been called to account regarding IR35. If you don’t have the legal in-house know how, it’s time to get some experienced help with your payroll. Companies need experienced HR specialists that know the laws in the countries relevant to them. At Project Recruit, we have partnered with 32 accountancy firms in order to ensure the acquisition of such complex knowledge requirements. These firms provide global coverage of payroll legislation and systems. This allows our clients to comply with the laws now, and the laws as they change.

If you have any queries about international payroll and how it may affect you, feel free to get in touch. We will get back to you with relevant information, specific to your query

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