How Should a Remote Company Manage Payments And Compliance?

How Should a Remote Company Manage Payments And Compliance?

Managing payments is essential in both cases, whether you’re already working with remote staff or considering moving your business remotely.

The problem of handling payments becomes more pressing as your business grows because your workforce may be spread out among various nations, each of which would have its legal requirements. Even if there are many options, sending money using Transferwise or Paypal isn’t the only way to transfer money.

Other considerations include payroll management, calculating gross and net salaries, submitting fees like TDS with the appropriate authorities, and issuing payslips when the payment is processed. While all of these might appear complex and time-consuming, they are relatively simple once the proper procedures are in place.

Before we continue, your responses to the following questions will help us lay the groundwork for how you should be handling payments for your remote team.

    1. Is the employee or contractor employed full-time?
    2. Do they receive both fixed and variable pay or only a set salary
    3. What country do they call home?
    4. What is the country’s base currency?

When you have provided your responses, everything will be more transparent, including the payment provider, exchange rates, the time of the payment, the currency, and other issues.

There are numerous approaches to managing payments and compliance when you operate a remote business.

Utilising Online Payment Platforms Like Transferwise Or Paypal

Online payment systems like Paypal make payments easy but can have drawbacks. For each transaction, they impose a predetermined fee based on the country plus a flat rate of 4.4%. Furthermore, since a fee is associated with each transaction, it is not the most cost-effective method of sending money for recurrent payments.

Using Local Partners

Local partners act as a point of contact between the parent company and the employees and help the company join its employees to the payroll of the local company. This could appear to be a practical choice at first, but it is a terrible choice over time. It causes unneeded stress from a legal perspective.

Establishing An Offshore Entity

Setting up an offshore organisation looks like a logical choice if you intend to conduct business in a nation for an extended period.

The advantage is that it is intended for the long term and provides more stability than the other two options. The drawback is that you are responsible for handling your taxes, submitting papers to the appropriate authorities, and managing the complete compliance procedure.

Utilising A Supplementary Service Provider

Using a third-party service could avoid all the headaches you would otherwise have. Service providers can help you with all the paperwork and processing taxes every month, even if you desire to have your offshore corporation. Out of all the options, this is the most favoured and advised.

Need help?

For over seven years, KPG Taxation has offered Australian businesses payroll setup and management services. Payroll investment has a critical role in ensuring employee satisfaction and better performance. Get in touch with the KPG Taxation team today!

Consulting with KPG Taxation

Focus On Growing Your Business, Leave The Accounting On Us!

  • Income Tax : File your taxes & get the best claims & returns.
  • Accountancy : Hire expert accountants to manage your transactions.
  • Bookkeeping : Let us handle your record books and expense reports.
  • Business Advisory : From company set-up to payroll, we handle it all.