GDPR is the tip of an iceberg of change in global payroll this year
International payroll is changing this year. A lot. And with GDPR the tip of an iceberg of change, global payroll managers will have a lot to deal with.
For companies who have employees working in other countries global payroll compliance yet again has moved on, none more so than in Europe. If you’ve made your first foray into international operations and don’t have a full presence in any one country, conducting multinational payroll operations effectively is set to be a whole lot more difficult.
Implementation of tax reform measures in the U.S. may also substantially change withholding requirements and deductions that affect employers of foreign workers in the U.S. and American expatriates around the world.
With a Global Payroll Association survey in 2017 suggesting 41% of global payroll professionals citing lack of knowledge of local legislation and requirements as a major challenge, what next for payroll professionals?
So, let’s start with GDPR. The General Data Protection Regulation comes into effect on May 25, 2018, affecting the whole European Union. Don’t think the rules will apply to Britain as it leaves the EU? Think again – the Brits have signed up to it regardless of anything happening with Brexit.
Although the regulations apply to EU citizens, multi-nationals with expatriate employees will very likely be affected. If you’ve got people in Europe GDPR will affect your global payroll compliance and data transmission.
But what about EU citizens working stateside or in another global country? You’ll still have to ensure that their data is being managed in line with GDPR legislation — not just the local legislation of the country in which the employee is based. The regulation covers data privacy and transmission of personal data and will affect payroll. Check that your payroll is complying with the new law before it’s too late.
So what else is changing in International payroll?
- France and Romania will reform social tax systems in 2018
- Brazil is going online with Esocial
- Argentina is changing the Unified Social Security System
- Australia is introducing single touch payroll
- Finland announces plans for electronic tax filing
- Belgium, Malaysia and Portugal are amending tax brackets
The ability to access and update information 24/7 is becoming more critical as is enabling HR, in-country managers, and international employees to work together seamlessly across multiple locations. With real-time information at their fingertips, teams can also rest assured that they’re always working with the latest data.
The best international payroll providers will ensure there is a complementary HR system such as IRIS FMP’s cloud based HR software solution Amity, which takes away the hassle of HR management and engagement with employees on a different time zone.