Expanding overseas? Find out here if payroll will be a headache

If you are thinking about expanding overseas, I recommend you see how your chosen country ranks in NGA’s latest Global Payroll Complexity survey. This ranks 35 leading economies, based on over 850 responses. If you are planning to expand into a country which has high Payroll Complexity, take the following steps:

  • Start preparing your payroll implementation extra early and make sure you have the right information, resources and budget to operate your new payroll effectively. This is particularly true for the major Continental European economies such as Italy, France and Germany, which are ranked as the most complex payrolls in this survey.
  • Make sure your in-house staff or outsource provider come highly recommended and have all the technical skills you will need.
  • You may well need to provide HR data that is not needed for your current payrolls, so be prepared to amend your payroll processes.
  • You may also find that the cost of paying and filing additional taxes and social security is higher than expected. Don’t skimp on due diligence and keep asking questions of your supplier if you are unsure.
  • High payroll complexity is often an indicator of complex employee legislation, which can lead to high employment legal adviser costs if you need to amend or terminate employee contracts. This may mean that any future restructuring of your international operation is more expensive and difficult than you are expecting.
  • Payroll complexity is a useful measure for other reasons. Low payroll complexity is a good indicator of those countries which are making a determined effort to attract overseas investors. The prime example of this is Singapore, which is ranked as the easiest country payroll in this survey. Other Asian economies also compare favourably on this score such as Thailand and Malaysia.

This survey is available in a number of versions on their website. My personal favourite is NGA’s country-by-country analysis which you will find a link to here (you need to register to download) >>http://resources.ngahr.com/payroll-complexity-index-2014-country-overview . This contains a good summary for each country of the drivers leading to payroll complexity, so chances are it will teach you something useful about the location where you are planning to expand.

If you would like to discuss any of the issues involved, please contact us.

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