How to Manage Payroll for Remote Employees

A study conducted by AND CO and Remote Year on thousands of workers in the world indicated that 55% of those surveyed worked remotely 100% of the time.

There is an increasing number of workers who work at home and generate reasonable and decent earnings. This has been attributed by inter-connectivity brought about by the internet.

If you are a payroll manager who has one or several employees stationed in remote locations, you need to know how to handle their pay and deductions. This guide is for managers of teams that include remote employees.

Read on to discover how to easily do payroll for remote workers.

Who Are Remote Workers?

Your company has opened a new branch in a different city, state or even abroad. There is a permanent staff that will head out to the new offices. Or take a scenario where you are managing independent workers and freelancers spread out in different locations.

As a payroll manager, you need to have knowledge of dealing with these workers. This is specifically on how they get salaries to them and how you manage issues about taxes and social security benefits.

There are two types of remote workers with different patrol needs as highlighted below.

Contract Workers and Freelancers

These are the easiest to deal with in terms of payroll work from home. All you need to figure out is how money gets to their accounts. Modern technology has ensured that this transfer takes a matter of minutes.

Once you agree whether the contractor needs a direct bank transfer or through payment platforms like Paypal, then you are good to go. You, however, have to ensure they submit their taxes accordingly.

Full-Time Employees

These are a bit complicated. If they are within the country, they are subject to social security benefits and other taxes. You have to develop a payroll service system that ensures taxes deducted reach authorities in good time. This ensures the workers meet their tax obligation as well.

Managing Taxes

Taxation is always a complicated subject. When you manage a full-time remote worker, it’s vital to know that the tax regime you need to consider is the location where the worker is and not the head office.

Some locations require payment for both local and state taxes while others are just national taxes. Understanding the different tax requirements will make you an outright winner.

Money Transfer for Remote Workers

Thanks to technology, money transfer has been made easy and cheaper. However, the choice of the medium should be considered greatly. For some transactions, it’s cheaper to wait until they accumulate before sending to reduce the expenses.

Ensure the worker is comfortable with the option that you suggest. Paypal has become an easy method, but there is also mobile money transfer and traditional bank transfer.

Shop for Payroll Software

The market has several good payroll software that can be used to ease the headache for you. Most of them are customizable and you can input the factors of location and payroll taxes for remote employees in it.

Manage Your Remote Workers Easily

We have observed that for you to excel in managing remote workers, you need to focus on their location for tax obligation purposes. You also need to figure out how they receive their pay. Then add an efficient payroll software and you are good to go

There is more to learn especially on the management of employees and how to get the best from a good working environment.