Payroll services and processes can differ from country to country, but there are still some elements that are recognisable worldwide. This is great news for any business looking to expand globally and take some of their employees with them. However, it is important to understand that payroll is not a simple area to navigate, and can cause issues for businesses if they’re not compliant. Luckily, there are payroll service companies out there to help.
If you’re looking to outsource your payroll, you are entrusting your services to the hands of qualified professionals. Here at Payroll Worldwide, we provide payroll services to businesses in Latin America and those wishing to expand. If you’re concerned about your payroll, here are some of the factors that translate nationally.
Income Tax and Tax Credits
Unless you’re one of these thirteen countries, all employees enrolled on payroll will levy an income tax. However, the rates will vary, and some may implement a company tax to ensure fairness for both the employee and the employer. Some countries won’t start taxing people until they reach a certain salary, and some countries have a flat tax rate, whereas others will gradually increase as the wages increase. In Mexico, income tax rates range from around 1.92% to 35%, but their corporate tax rate is a flat rate of 30%.
Also, some countries will also offer tax credits for employees enrolled on payroll. This is based on a range of factors, such as disabilities, pensions and family status. For instance, in Brazil, resident companies are taxed on worldwide income, but they can offset the income tax paid in the country of domicile against corporate tax. If you are expanding abroad, it is important to make yourself aware of the tax credit incentives in the country. By looking towards a payroll service company, you don’t have to worry about a thing.
Employee and employer social security contributions are required in most countries. It may have a different name, however; for example, in the United Kingdom, it is called National Insurance. Employers usually have to pay social security contributions, and this covers elements such as pensions, medical care and compensation. In Chile, the employer and the employee both contribute 2% of the salary.
Employees will also pay social security contributions, and they will have a special number to help enrol them onto payroll. Every single person will have one in order to earn a living. This allows them to gain benefits such as healthcare and maybe a lower contribution than their employer (this is an exception in certain countries, like Chile). In the UK, national insurance contributions go towards benefits such as the National Health Service (NHS) and Statutory Sick Pay (SSP).
Here at Payroll Worldwide, we can help you navigate payroll in countries in Latin America, with a full scope of knowledge to help you remain compliant. To find out more, please visit our services page here.
Almost all countries will offer all employees benefits. These are typical benefits, such as maternity leave, and benefits in kind, like health insurance and gym memberships. Usually, benefits are common elements that businesses provide, and are usually expected by employees in a certain company. Benefits in kind or incentives are to help entice employees, and range from company cars to corporate days out. Businesses may be liable to pay tax on these benefits, but like most instances, you must double-check with the country you are expanding to.
Benefits can make or break whether an employee joins your company, but it can be hard to work out exactly what employees need. Therefore, if you are expanding, a payroll service company can even sort out your recruitment processes, finding the very best talent for your business. Here at Payroll Worldwide, we have experience in providing services for a range of industries, and can help you cement your onboarding processes.
How We Can Help
If you would like to ensure that your payroll processes are compliant and efficient, a payroll processing company can help you out. You don’t have to worry about employing a whole new team, as a payroll company can handle all elements of your human resources (HR) too.
To find out more, or to receive a free consultation, please fill out our online form here.