If you don’t work in a traditional office setting, the issue of how to pay remote employees is probably on your mind right now.\nCompliance issues, currency exchange rates, minimum wage, income tax, hidden fees, and countless other challenges can plague teams looking to pay remote workers.\nBut before you start paying your team for remote work, it’s worth taking the extra time to make sure you’re classifying your team correctly. After all, it might be more cost-effective to classify your remote employees as independent contractors.\nLet’s quickly make sure you’re on the right track.\nIndependent contractors vs. remote employees: IRS common law test\nIf you’re concerned about compliance issues regarding remote employees and independent contractors, it’s worth reviewing the IRS Common Law Rules. In short, there are three questions to consider:\n\nBehavioral: Does the employer of record have control over how the worker does their job?\nFinancial: Does the employer decide the payment method for their remote workers? Does the employer pay income tax, who provides work materials, or whether they will reimburse the employee for said materials?\nRelationship: Does the employer provide benefits (i.e., pensions, insurance, vacation pay, etc.) for said remote worker?\n\nIf you answered “no” to these questions, you might want to switch gears and read our guide to paying independent contractors. If you answered “yes,” let’s look into the best methods for paying remote workers.\nWhat you need to know when paying your remote employees\nFor your local employee’s pay, treat them as you would any other local employee. If you decide to hire international remote employees, you will need to determine the following:\nPayment frequency and currency\nMost countries require you to pay employees at least once a month. Will they be paid weekly, biweekly, or monthly? What tool(s) will you use to pay employees in their preferred currency or make the correct exchange rates?\nUltimately, these decisions are up to you. However, there might be other factors that dictate how you answer these questions.\nTaxes, deductions, and local labor laws\nYou’ll have to withhold income taxes and be aware of the nuances that vary by country, state, or territory. In Australia, for example, you must contribute at least 10% of your remote employees’ earnings to their selected super account.\nPayroll forms\nEach country will have forms that you will need to fill out for your employee’s pay. For instance, when you pursue an employee in Canada for remote work, you must obtain their social insurance number (SIN) and a completed Form TD1, Personal Tax Credits Return.\nRemote employee payment methods\nPayroll management for remote workers involves planning and obtaining local knowledge based on each employee’s home.\nSetting up acceptable payroll procedures for each country or region where your remote employees’ work might be tedious for small businesses. Local payrolls, contributions, taxes, and laws may be beyond your HR team’s bandwidth.\nHere are two methods to pay your remote workforce:\n1. Use an outsourced payroll provider for your international employees\nOne option is to outsource payroll to a dedicated payroll system provider.\nThese companies specialize in handling payments and benefits for remote employees to help you focus on securing the best talent. They’ll be able to legally handle your payroll because they have registered entities in every country they provide their services in.\nUsing an outsourced payroll system provider can simplify your payroll management process significantly and relieve you from the stress of adhering to unique laws for each team member’s home country.\nSuppose you decide to hire full-time remote employees that reside in a country outside of where your company is registered. Here are three outsourced payroll system provider options that can help you with international employee payroll.\nDeel\n\nDeel automates payroll for your remote employees in more than 150 different countries. Their offering includes onboarding, contracts, expenditure management, benefits, payroll, local tax, and built-in compliance for your global workforce.\nOnce you hire an international employee, you can have them working in a compliant manner with just a brief setup. Just customize the contact in Deel and send them a bespoke contract that complies with their local laws.\nRemote\n\nRemote.com will help you stay compliant in more than 60 countries. They have wage and benefit simulations that you can use to run a fair and legal international remote team.\nOffering the most competitive benefits package can help you attract and retain international employees. If you have questions unique to your situation, Remote.com has a suite of HR and legal experts to guide you every step of the way.\nLano\n\nLano gives you the confidence to hire and pay your remote employees in more than 150 countries. You can also automatically pay your remote employees in over 50 different currencies, helping you manage fluctuations. With Lano, you can monitor the status of each payment in real-time.\nLano gives you the tools to build and manage an international team quickly and easily.\n2. Use a payroll platform\nIf you have the right personnel at your disposal, you can take on payroll internally.\nStart by considering the best payroll platform for your team. If this is an area where you’re lacking experience, most payroll providers offer webinars, extensive training, or tutorial videos to help you get a feel for their product.\nIf you have a human resources lead at your remote company, they’ll probably be well-versed in various payroll platforms. If you don’t have a strong opinion about a payroll provider, involve them in the decision. This way, you can delegate a tedious task to an HR lead that will need little to no training on the platform.\nQuickBooks\n\nQuickBooks’ Multicurrency feature makes paying remote employees in their local currency easy.\nWhen you toggle on Multicurrency, you can assign a currency to each customer, vendor, or bank account on your payroll hassle-free. Once you’ve made these adjustments, QuickBooks will take care of all currency conversions and pay rates.\nHowever, you will still need to understand how to stay compliant in each country where your remote employees reside.\nGusto\n\nGusto’s HR capabilities make it a powerful payroll solution — but only for remote teams based in the U.S. Gusto only supports employees if they have a valid U.S. Social Security Number, work address, home address, and bank account.\nFrom there, Gusto calculates pay rates, and files your federal, state, and local payroll taxes. They can also handle your W-2s, 1099s, and new hire forms on your behalf.\nHubstaff integration with Gusto and QuickBooks\n\nHubstaff is a productivity platform that allows you to track time and pay your remote employees for the work they have completed. With Hubstaff, the days of manually documenting time spent on tasks are over.\nInstead, have your remote team use Hubstaff start-and-stop timer to track time. Hubstaff integrates with Gusto and QuickBooks, so you can turn your remote employees’ tracked time into timesheets and approve them with just a few clicks.\nChoosing how to pay your remote employees\nUltimately, how you pay your remote team members comes down to various factors that are unique to one’s situation. Here are three main things to keep in mind when making your decision:\n\nWill you be paying your remote team as employees or contractors?\nWhere are your remote team members located locally or internationally?\nWill you manage all this in-house or hire a payroll company?\n\nPaying remote team members as employees comes at a cost — especially when you have a significant amount of your workforce located internationally. In this instance, you should expect to spend substantially more money when you opt to pay everyone as employees.\n\nSimplify employee payroll with Hubstaff\nTurn your remote employees’ tracked time into timesheets with ease.\n\n\nWhether you choose to pay remote employees through direct deposit, a money transfer app, or another method, just be certain that you’re compliant with your state, country, or territory laws.\nTo be certain, you might also want to check out our other articles on money transfers:\n\nEasy ways to send money to India\nHow to send money to Colombia\nHow to send money to Ukraine\nHow to send money to Brazil\nHow to save money on payroll\n\nHopefully, this article has helped you decide how to pay your team. That said, do you have ideas that we didn’t mention? Drop them in a comment below.