Attracting global talent is easier than ever, and it’s never been more strategic either. Now, companies are assembling global teams, regardless of the continent, time zone, and culture in which they operate. However, this trend raises an essential question: how to pay international employees accurately and on time.
In this tutorial, you will learn how to remit salaries to international workers in 2026. Additionally, you will understand how to pay remote international employees by selecting the most optimal method for remitting salaries to your global workforce based on your plan and objectives.
Dealing with your first global employee, or managing large teams across 20+ countries and seeking to remain compliant, organized, and confident in the process? Let’s begin.
Why Paying International Employees Can Be Challenging
International recruitment enables companies to access the best and brightest talent. However, compensating those international employees isn’t simply about integrating them into your company’s current payroll setup. Each region follows various regulations on:
- Taxation
- Social security contributions
- Overtime
- Public holidays
- Minimum wages
- Core benefits
- Payment systems
- Currency regulations
- Labor contracts
It is essential to also inquire about the following: Do international employees pay taxes in both countries, or only in one, where they are working?
That’s where several companies face the challenge, especially if they lack local business structures. Compensation becomes complicated when employees are spread across multiple countries and must remain compliant with local labor and tax regulations in each jurisdiction.
The bright side is, you have choices. There are several models available, allowing you to employ and remit salaries to pay foreign employees hassle-free and on a large scale.
How to Pay International Employees: Your Options
Here are the most popular and efficient methods for paying international employees in 2026:
1. Setting Up Local Legal Entities
In some cases, organizations may decide to establish a subsidiary corporation or branch office within the nations from which they often source personnel.
Pros:
- Unlimited control over HR and Payroll
- Ability to recruit as a local employer
- Long-term stability
Cons:
- Very costly to set up and maintain
- Involves legal, tax, and human resource personnel
- Long setup times (in months or years)
- High recurring cost of administration
It is mainly suitable for companies with significant employee plans within a country.
2. Involvement of an Employer of Record (EOR)
The Employer of Record is often the most suitable method for paying international employees if you lack a subsidiary. An EOR handles:
- Legally hiring employees on your behalf
. - Payroll
- Local taxes
- Social contributions
- Compulsory benefits
- Compliance with labor laws
You will still be in control of the day-to-day activities. The EOR handles the legal and administrative tasks.
Why do companies choose EOR?
- Fast hiring (in days)
- No need to establish a local legal entity
- Total compliance
- Risk decreased
- Local currency payments
- Seamless on-boarding
It’s ideal for companies seeking to determine the most effective way to pay international employees, reward global freelancers, or explore foreign markets.
3. Hiring Contractors (Freelancers or Project Professionals)
Some organizations may opt to hire contractors. It is beneficial for organizations that require flexibility and adaptability.
Pros:
- Public engagements
- Less obligation
- Lower cost
Cons:
- Risk of misclassification
- The absence of employer control
- Poor retention rates and limited brand impact
Ensure that contractors have the legal right to work in the country where they perform their services. Misclassification penalties vary by country, and can include back taxes, social contributions, and employee reclassification.
4. Leverage Global Payroll Processing Companies
There is also global software for managing employee salaries, commonly referred to as global payroll software. The software processes:
- Payroll calculations
- Payment distribution
- Currency exchange
- Local tax filings
It is beneficial for companies with multiple entities operating internationally.
5. Compensate Your Foreign Staff Through Local Partners or PEOs
In some nations, individuals have the opportunity to utilize a Professional Employer Organization (PEO). It is comparable to EOR, yet often involves setting up the company as a local corporation. A PEO typically operates under a co-employment model. Unlike an EOR, a PEO typically requires your company to already have a legal entity in that country.
Key Considerations When Paying International Employees
After settling on a remuneration package, consider the following issues:
1. Tax Rules
One of the most significant questions is whether individuals working internationally pay taxes in the countries where they are employed.
In most instances, yes. Tax residency usually depends on physical presence, the center of vital interests, and local residency rules:
- Income tax
- Social security
- Medical insurance
- Pension payments
Tax residency usually depends on the following:
- Days spent in the country
- The position of the permanent home location
- Government rules
Additionally, workers may be required to submit tax returns to both their home and host countries, as treaties may stipulate this requirement.
2. Currency and Exchange Rates
The company must pay salaries in the currency that is:
- Recognizable
- Legal in the land
- Acceptable to local authorities
- Defined within job contracts
Salaries must be paid in the currency defined in the employment contract and accepted by local authorities. Exchange rates may influence the amount of wages. Most companies implement currency buffers to ensure fairness and justice.
3. Local Benefits & Leave Rules
Each nation imposes its laws. Obey the following:
- Annual leaves
- Sick leaves
- Paid maternity/paternity leave
- Public holidays
- Mandatory insurance
- Retirement contributions
Employees expect these benefits, and the law requires you to provide all of them.
4. Contracts and Documentation
Internationally compliant contracts should provide for:
- Compensation
- Working hours
- Role
- Benefits
- Termination rules
- Probation
- IP rights
- Confidentiality
Every nation demands a different language in the waiver. It is not feasible to adopt the US and European templates.
5. Payroll Schedules
Different nations establish their own rules regarding the frequency of compensation to workers by employers.
- Monthly
- Bi-monthly
- Once
Align your processes with local patterns and requirements to ensure seamless integration and compliance with relevant regulations, while also accommodating international employees.
Step-by-Step: How to Pay Remote International Employees
Here is the easy procedure to follow for paying international employees:
1. Choose Your Model of Recruitment
Choose whether to:
- Establish an Entity
- Use an EOR
- Contractor – Hire
- Use global payroll
Your model influences compliance, cost, and timeliness.
2. Establishment of Compliance Contracts
Cooperate with local professionals or tools permitting:
- Local templates
- Legal advice
- Automated workflows
A compliant contract covers all parties and protects both you and the employee.
3. Collect Employee Documents
You’ll need:
- IDs
- Tax figures
- Account details
- Address proof
- Social security information
4. Create Payroll Profiles and Compensation Settings
Set your salary structure:
- Wage
- Money
- Benefits
- Deductions
Use the software to perform calculations.
5. Manage Taxes and Social Contributions
Ensure correct:
- Withholding
- Filing
- Payments to authorities
Errors in this area may result in an audit and a fine.
6. Send Payments
International payroll generally employs the following components and methods:
- Bank transfers
- SEPA
- Local payroll networks
- E-wallets
Payments must reflect local customs.
7. Continue to Adapt to Changes
The law evolves. The regulations change. Nations are continually altering their tax laws. Ensure that your software reflects it.
Common Challenges in Paying International Employees
Compensating global talent is highly rewarding, but significant challenges also accompany it. Below are the greatest obstacles companies encounter as they expand beyond their borders.
1. Misclassification Risk
When you decide to hire someone as a contractor, it becomes potentially risky if they are eligible to be classified as an employee under the law. The term “employment” is defined differently by various countries. Now, this is subject to multiple liabilities as you grow.
2. Currency Instability
Exchange rates have implications for take-home pay and the payroll budget. If you link salaries to the local currency, exchange rates can cause sudden changes. Companies often add currency buffers or peg salaries to a stable reference currency. It makes compensation unpredictable for both employers and employees, particularly in economies that are fluctuating.
3. Limitations on Banking
Specific bank regulations may hamper international payroll. Some nations may require opening local accounts, restrict international wire transfers, or have strict Anti-Money Laundering and Know-Your-Customer procedures.
4. Slow and Inconsistent Payments
Payment schedules vary across different countries. Public holidays, banking systems, and international remittance procedures are among the factors that cause delays.
5. Compliance Gaps
The laws are continually being updated—from tax laws to social contribution rates to minimum wage rates. It is very challenging to keep up with all this information across various continents. Inaccuracy, no matter how small, may often lead to complications and risks.
Best Practices for Paying International Employees in 2026
The global payroll best practices help organizations stay compliant, efficient, and provide a positive experience for workers.
1. Integrate Payroll Processing
Global payroll processing enables your company to manage employment activities through a single, centralized system, streamlining processes and reducing costs. These activities include:
- Contracts
- Legal documents
- Payment processes
- Benefits administration
- Tax filings
- Reporting
It will provide standardized behavior, reduce bureaucracy, and enable easy tracking of compliance activities across various countries. In other words, consolidating all this information in one system lets you address issues more quickly. You can also view and manage every task related to global payroll operations in one place.
2. Automate Where Possible
Automation reduces the chances of human error and increases efficiency—functions such as computing salaries, calculating taxes by local jurisdiction, preparing payslips, and managing leaves. Automated systems update currency rates daily or weekly, depending on the provider.
Automation will save your HR and accounting personnel from doing repetitive tasks, and the entire process of conducting payroll will become hassle-free, especially if you are handling different countries.
3. Local Experts & Associates
Even the most advanced global systems will always require local expertise. Local experts will provide, in detail, information on:
- Rules and systems in individual nations
- Employment laws
- Cultural norms
- Benefits standards
- Payroll timeliness
Their advice will enable your business to avoid mistakes and provide an employee experience tailored to local practices and needs. Engaging with professionals can help your business by boosting the confidence of your employees, who will also benefit from the support of their employers.
4. Keep Clear Documentation
Organized and precise records are essential for safeguarding your business and ensuring compliance. Keep accurate and organized records of the following:
- Contemporaneous contracts and addenda
- Payroll calculations
- Payslips
- Tax returns
- Social security filings
- Performance notes
Governments may demand proof of compliance. Auditing becomes simpler and limits liability by maintaining good documentation. Another reason is transparency for the employee, which improves employee trust and retention.
5. Use EOR for Fast Expansion
Employer of Record (EOR) is the most secure, efficient, and cost-effective manner by which companies can procure global talent without establishing any foreign entities. The EOR will oversee the following:
- Local employment
- Payroll and tax compliance
- Statutory benefits
- Contracts
- Risk mitigation
In this manner, your business can focus on growth and other operations, as the EOR handles all the complexities. It is appropriate for small and large companies, as well as organizations entering foreign markets.
How WorkMotion Helps You Pay International Employees Smoothly
WorkMotion is a platform for today’s global teams. It simplifies the entire global recruitment process, from onboarding to payment, so your company can recruit with confidence anywhere in the globe.
With one easy platform, you can:
- Employ people from 160+ countries.
- Engage with the global talent pool without the need for a local setup.
- Produce completely compliant, jurisdiction-specific contracts.
The contracts are reflective of the prevailing laws, taxes, and benefits applicable at the time:
- Manage Mandated Benefits & Optional Benefits: WorkMotion will provide all employee benefits as stipulated by their nation, as well as any other incentives you may offer.
- Run Global Payroll with Accuracy and Reliability: The system calculates salaries, applies the correct deductions, files tax returns, and automatically pays wages.
- Onboard Talent Within Days: Document workflows, e-signatures, and local compliance tools make it easier and simpler for you to welcome those new hires.
- Minimize Compliance Risks Across All Markets: Real-time updates and local insights enable your business to stay compliant with ever-changing regulations.
WorkMotion introduces order, organization, and compliance into the highly complex process of global employment. It simplifies paying international employees, regardless of whether you are compensating global workers, and irrespective of the number of countries, currencies, and sets of laws you must accommodate.
Conclusion – Building Your Global Team with Confidence
Paying international employees in 2026 does not have to be complicated. With the right tools and partners, anyone, anywhere, can be hired with confidence and compliance. WorkMotion simplifies the process.
With a single global platform, you can recruit, hire, and pay workers internationally without needing to establish local companies.
WorkMotion provides three potent tools for global companies:
- Employer of Record (EOR): Employ full-time workers globally without setting up legal structures. Compliance and payment of talent in local currencies remain ensured.
- Direct Hiring: Hire and manage in Europe for 21 countries with compliant contracts, HR workflows, and onboarding.
- Contractor Management: Engage global contractors with proper documentation and simpler payments to avoid issues of misclassification.
With WorkMotion, scaling the world is now possible with confidence, control, and speed.
Your global workplace should have access to the best global payroll solution – and WorkMotion is here to provide just that. Book a demo now!
FAQs
How to pay international employees?
You can pay international employees using an Employer of Record (EOR), global payroll provider, or compliant contractor setup, depending on your structure.
What is the best way to pay international employees?
The best way to pay international employees is through an EOR, which handles compliance, payroll, taxes, and benefits in local currencies.
How can I pay foreign employees without a local entity?
You can pay foreign employees using an EOR or global payroll platform that manages contracts, taxes, and local employment requirements.
Do international employees pay taxes?
Yes, international employees are required to pay taxes in their country of residence, and proper payroll setup ensures the correct handling of all deductions.
How to pay remote international employees efficiently?
You can pay international employees by using platforms that automate local currency payments, taxes, and social contributions.
How to pay employees working across international borders?
To pay foreign employees working across international borders, use global payroll systems or EOR services that manage compliance, contracts, and currency conversion.
Can I pay international employees as contractors?
Yes, you can pay international employees as contractors, but ensure that their legal classification is in accordance with each country’s laws to avoid compliance risks.
