There is perhaps no more fundamental function in business than paying employees accurately and on time. Meeting contractual obligations to the people who give their time to the company is the most basic level of payroll compliance.
But there is a lot more to payroll compliance than that. Payroll is one of the most highly regulated functions in business today, often with layers of tax and employment law at the national, regional, local and, increasingly, multinational, level.
To ensure payroll compliance, employers must abide by a wide range of regulations relating to taxation and social insurance, delivery of statutory reporting, data protection, and employment conditions (including employee validation, minimum wage levels, benefits, allowances, leave entitlements, working hours and overtime rules). They need to maintain and file complete and accurate records – and pay the correct taxes – on time for every employee, in line with the latest regulations.
The growing trend to employ local talent means multinational companies now, more than ever, need a thorough understanding of local taxation and other employment laws.
Keeping on top of payroll-related rules and regulations in a single jurisdiction is complex enough. However, for companies handling global payroll, there is an intricate web of widely varying payroll-related regimes to keep up to speed on, and stay compliant with.

This is what makes payroll compliance one of the key drivers of complexity in doing business around the world. To make matters even more challenging, some of the most complex markets in which to do business are also the most punitive in terms of fines and penalties for non-compliance.
Payroll compliance is therefore one of the biggest areas of financial and reputational risk for multinational organisations: the consequences of making a mistake, even inadvertently, can be severe, putting companies at risk of investigation by the authorities.
Source: Global Business Complexity Index 2022 by TMF Group