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ISSUE 3
If a company manages contractors across two or more countries, they need systems capable of ensuring that they: Pay their global contractors in the right currency in amounts that accurately reflect changing currency exchange rates
Several key differences exist between contractor and employee payment processes. Contractors are usually engaged for specific projects or periods and are paid based on deliverables or at a predetermined rate. Employees, on the other hand, are paid regular salaries or wages that include benefits such as healthcare, retirement plans, and holiday pay. It is essential that there are specialized processes and systems in place to manage contractor payments properly.
Comply with diverse tax regulations across different jurisdictions
Cross every T and dot every I within their payroll system while also ensuring payments across time zones are made on time Maintain accurate records of payments for audit and compliance purposes Classify their payments correctly – contracts versus full-time versus gig workers Have systems in place that allow for them to pay contractors outside of the usual payment dates – often these payments are weekly or bi-weekly as opposed to monthly Payroll: Payment due diligence Within all these compliance and legal requirements, there is also the person behind the paycheck. Employees are also at risk if salaries are not processed and paid on time, in the right currency and with the correct deductions. They have their payments to meet and their taxes to manage. Incorrectly classifying a contractor can have serious repercussions for the contractor and company alike.
The question is – how?
Removing the friction Companies can implement several strategies to reduce the friction caused by these pain points and optimize global contractor payment processes. These include: Implementing standardized payment processes and payment terms across all regions to reduce complexity and improve visibility and efficiency. Leveraging technology to automate payments and compliance – the right solution will have the capacity to deftly manage multiple inputs, requirements, regulations, time zones and taxation regulations across a vast global employee network. Technology is key to reducing the
admin load for payroll and HR teams while improving payment efficiencies for companies and contractors.
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