New International Payroll Series

Who will be hit hardest by new Payroll laws?
Global finance and IT will have to adapt.

Rose McCarter-Field

By Rose McCarter-Field

As companies continue to move to a more remote workforce, some are finding the transition to be permanent. Many have found remote working is resulting in higher levels of productivity and lower levels of expenditure such as travel and office space.

McKinsey research has found that the sectors with a most notable move towards long term remote working are finance, scientific, and IT. The finance sector are finding that the majority of their work can be carried out remotely, without loss of productivity.

In the UK, business and financial services are a large share of the economy. This permanent move to remote working will change the nature of our workplace. A more global operation will also change the nature of all HR functions, especially in finance.

Increased levels of remote working allows for a larger available talent pool, as you can recruit from anywhere. More globally dispersed staff will be followed by a different payroll system. 

This global move to international and remote working has triggered a change in tax legislation in many countries. These changes in legislation were triggered by IR35 in the UK. As a result, there is an increasing liability of the company to ensure staff employment status and income tax payments are correct. These new laws across the globe mean that companies will need complex payroll systems in order to stay compliant with new legislation. Canada, Germany and Italy are the first to make this change. This means that a UK firm with staff in these countries has to make sure the employment status is correct according to the country each member of staff resides in, and that the right government(s) are getting the right amount of tax.

This will be a big change for any internationally operating payroll team, most notably in finance as it effects such a high percentage of staff.

For more information on the coming payroll changes read this article: Workplace Internationalization has Triggered a Change in Tax Liabilities

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