If your business has gone international, it’s time to figure out how you’re going to pay your staff in other countries. Even if you’ve expanded from the US to Canada, there’s a number of steps you must take to ensure your business runs smoothly, your employees are paid on time, and it’s all in compliance with international regulations.
In terms of paying international staff members, knowing where to start can be tricky. If you’re wondering how to pay international employees, here are some of the steps you must follow.
1. Register Your Business in Both Countries
Depending on where your business has expanded, it’s an essential first step to register your business in both countries. This is the easiest way to create a smooth transition and ensure your employees are being paid properly.
Even if you’re a Canadian business that’s moved South, it’s still important for you to register your business in both countries. Regardless of whether it’s a big expansion or a small one, it’s a simple first step that will create benefits down the road. Plus, for the most part, registering your business in another country is as easy as registering it in your own.
2. Do Some Research
Before you even think about how to pay international employees, you must research the country’s rules and nuances surrounding payroll. For instances, in some countries, it’s expected that employees be paid monthly rather than bi-weekly. In others, overtime pay is rare or restricted by law.
It’s always best to do research or consult experts before you jump into hiring and paying an international employee.
3. Consider Exchange Rates
If you’re planning a trip overseas, you’re definitely going to consider exchange rates. The same thing applies when you’re hiring and paying an international employee.
As you learn how to pay international employees, having a clear outlook of exchange rates is crucial. It would be wise to have an understanding of your budget and how much you can spend on a new employee, and then factor exchange rates into the equation.
As exchange rates begin to fluctuate, you may find yourself going over or under budget due to an international hire. One of the easiest ways around this is paying your international employees in your own currency. So if you’re an American business that’s hired an employee in Canada, paying them US dollars can reduce complications, as long as you’ve considered the policies and rules that are involved.
4. Classify Them Properly
If you want to avoid trouble when hiring an international employee, do the research and make sure they’re classified properly. It might be easier to claim all international employees are independent contractors so you can just cut a cheque and avoid payroll and tax legislature, but if you do so, you run the risk of having the CRA, the IRS, or a dozen other international organizations penalize you.
Just as you would with a seasonal employee, double check which employee classification regulations you must abide by in terms of paying international workers properly.
In the long run, when you don’t run into trouble, you’ll be glad you took the extra time to classify them properly.
5. Get Professional Help
While it might sound easy, knowing how to pay an international employee is difficult. With varying laws and fluctuating exchange rates, managing payroll can become quite the burden.
To make the process easier and to give you peace of mind, consider reaching out to a payroll service provider. When you outsource payroll, you can rest easy knowing your employees are being paid efficiently and within the laws of the country you’ve expanded to.