Publication 18 pages

Challenges of payroll in Europe for US companies

28 September 2015

As small and medium-sized enterprises (SMEs) grow in size and scale, the complexity of their payroll process changes.

When it comes to international expansion, organising payroll can becomes even more challenging due to the vastly different compliance requirements within each market, as well as the individual cultural and legal nuances.

For US-based companies, the European market can be particularly complex. Although the 27 member countries of the European Union (EU) are unified in some ways, when it comes to interpreting payroll, they can vary differently, from how they implement EU directives, to government disclosure requirements. Non-EU states such as those in Eastern Europe, Switzerland and Scandinavia can present unique difficulties of their own, ranging from a lack of electronic reporting to complex national and municipal tax systems.

In a function like payroll, which relies heavily on process, it’s easy to forget about the importance of observing cultural sensitivity and the related complexities. But in order to have a successful global impact, it’s important that cultural sensitivities are not just observed but fully embraced.

This briefing paper looks at some of the major challenges that SMEs from the US can face when managing payroll in Europe, advising on best-practices for those companies seeking to partner with a third party supplier in order to manage this function.

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