When you hire a remote team, one of the challenges you’ll face is managing their payroll. The IRS requires that you file 1099 forms to tell Uncle Sam how much you paid each employee. In addition to the IRS, remote companies also face issues when hiring employees in different countries. Luckily, there are a few legal ways to handle remote team payroll. Read on to find out how you can use a PEO to keep your team’s finances in check.
Your Remote Team Can Be Paid More Accurately And Promptly
When managing payroll for a remote team, you’ll want to keep in mind how often your employees need to be paid. Some companies pay workers weekly, others on monthly or daily. While this is perfectly acceptable for a small company, it can become problematic if you’re dealing with multiple jurisdictions. To avoid this issue, you can implement a payroll management system through a defined policy and procedure. In this way, your remote team can be paid more accurately and promptly.
When managing payroll for a remote team, it’s crucial to consider whether or not the person is a full-time employee or an independent contractor. While paying an independent contractor is easier, you still need to follow tax laws in their jurisdiction. If you want to avoid paying taxes in these countries, consider hiring an independent contractor. The difference between hiring an independent contractor and hiring an employee is substantial. A misclassified contractor is likely to be penalized by the tax authorities, which could cost you a significant amount of money.