Paying people in several countries: local payroll, global payroll or employer of record
Updated 28 October 2026 · 6 min read
Once you employ people in a second country, payroll stops being one process. Each country has its own taxes, social contributions, filings and payslip rules. There are three common ways to handle it.
1. Local payroll in each country
You use a payroll tool or bureau in each country. Compliance knowledge is local and often strong, but you run several processes, logins and reports, and consolidating costs for finance takes work. It suits companies with a legal entity and a meaningful headcount in each country.
2. A global payroll platform
One platform pays people in several countries, sometimes through local partners behind the scenes. You get one process and consolidated reporting. You still need a legal entity in each country where you employ people.
3. An employer of record (EOR)
An employer of record employs people on your behalf in countries where you don't have an entity. It handles contracts, payroll, taxes and benefits; you direct the work. It is the fastest way to hire abroad and suits small teams in new markets. The cost per employee is usually higher, and many companies set up their own entity once a country team grows.
How to choose
- No entity in the country: an employer of record, at least to start
- Entities in a few countries with small teams: a global payroll platform
- Large teams in each country: local payroll, connected to one HRIS
- In every case: check how payroll gets leave, attendance and changes from your core HR
Questions to ask any provider
- Which countries do you cover directly, and which through partners?
- Who files statutory returns, and who is liable for errors?
- How do changes from our HRIS reach payroll, and how often?
- What reports does finance get, and in which currency?
Frequently asked questions
What is an employer of record?
A company that legally employs workers on your behalf in a country where you don't have a legal entity. It runs payroll, taxes, benefits and employment contracts while you manage the day-to-day work.
Is global payroll the same as an employer of record?
No. Global payroll pays employees of your own legal entities in several countries. An employer of record is the legal employer itself, so you don't need an entity.