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Global Payroll Calculator

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Why use a global payroll cost calculator?

A payroll cost calculator enables businesses to calculate the total cost of an employee, including wages or salaries, taxes, benefits, and other associated costs. The calculator considers various factors, such as minimum wages/salaries, payroll taxes, insurance premiums and retirement contributions to come up with a figure that can help companies and their employees review potential payroll costs.

By using our international payroll cost calculator, you can work out how much it will cost you to hire an employee in any given country, and compare countries. This ensures:

Hiring cost optimization

By doing a country comparison, you can quickly determine which country will be most cost-effective for building a global team. You can also work out how big you should make your distributed team based on that projected payroll cost.

Accuracy in your projected payroll figures

Trying to calculate manually has a high risk of error, compared to the automated approach in the calculator.

Compliance

Our figures are up to date, ensuring that projected payroll costs are reliable.

HR and People planning

With accurate payroll figures you can start to plan your overall HR strategy, including the appropriate mix of fulltime equivalent employees (FTEs) and contractors.

Accurate review of existing payroll costs

If you are unsure if your existing payroll is being paid correctly, you can use a global payroll calculator to ensure all amounts are accurate as a form of informal review or audit.

However, a global payroll calculator is not just beneficial to companies looking to hire. It is also beneficial to employees or prospective employees wanting more information on how their pay is calculated. It can help employees with:

Pay Structure Transparency

A global payroll calculator means employees can understand their pay structure better. They can see the breakdown of their salary, including taxes, deductions, benefits, and net income, in a transparent and comprehensible format.

Currency conversions

For employees earning money in their local currency, they can work out what the cost of their salaries and other pay components are in US dollars.

Country comparisons

Employees can compare their pay and benefits across different countries to be better informed in case they wish to move to another country to work.

Tax and benefits compliance

If an employee is unsure whether they are getting what they are entitled to, they can use a global payroll calculator to make sure that they are being paid correctly.

The costs covered by the global payroll calculator

The calculator covers the following costs of employment:

01. Employee Wages/Salary.

This is the employee’s gross salary (i.e., before any income tax or other employee contributions are withheld

02. 13th Month Pay/14th Month Pay.

These are extra payments offered in some countries which are equal to an extra one or two months of salary. In countries where a 13th or 14th month pay is legally required it is included by the payroll calculator.

03. Employer/payroll taxes.

These are extra taxes imposed specifically on employers. What they cover depends on the country of operation, but may include Medicare and social security taxes.

04. Compulsory contributions.

These cover various items including unemployment insurance contributions, workers’ compensation insurance, and pension contributions. In some countries these are covered in payroll taxes, in other countries they are separate items that go into the payroll calculation.

Which costs are not covered?

There are some costs which might be considered by some companies to be a cost of employment, that cannot be included in the global payroll calculator:

Special benefits and allowances.

For example, whether legally required or optional, some companies provide remote work allowances to employees. As these are employee-specific and not a universal requirement, they cannot be included in the calculator.

Additional health insurance, workers compensation or pension plans.

As these are not compulsory, even where they are market-standard, they cannot be included in a payroll calculator.

Severance pay.

As this is a contingent payment, depending on whether the individual is eligible, it is not included in the total payroll cost.

Cost of processing payroll.

Payroll has to be processed by someone, either in-house or by a dedicated payroll provider such as an Employer of Record. This indirect cost is not included in the total cost of payroll.

Training and Development.

The costs associated with employee training, professional development programs or seminars are not covered in a payroll calculator.

Recruitment.

Any costs of talent acquisition such as advertising, recruitment agency fees, background checks, and time spent by HR staff, are not included in payroll calculations. These costs are variable and depend on the priorities of the company doing its recruiting.

Relocation or travel support.

Companies generally decide for themselves which amount to provide to employees for relocation or travel support, and therefore the amount is not included in the total cost of employment.

Any additional corporate income taxes.

Sometimes, the presence of employees in a country can create a ‘permanent establishment’ meaning that, by hiring there, the company has become subject to corporate income tax in that location. Read more here to find out how to avoid and manage permanent establishment risk.

Frequently asked questions

What is a global payroll calculator?

A payroll calculator is a tool that helps employers calculate the total cost of employing an individual in another country. It is not enough to know simply what the minimum wage or average wage in a country is, as companies have to cover additional tax, contributions and benefits as part of their ‘payroll burden’.

Does a payroll calculator include tax deductions?

Yes, a payroll calculator will include in the total cost of employing an individual both payroll taxes, and any individual income taxes. The payroll taxes are a separate line item, whereas individual income taxes (as they are paid out of the employee’s salary) are simply included in their gross salary/wages.

Do payroll calculators handle benefits deductions?

Yes, where those benefits deductions are universal and mandatory, such as health insurance premiums or retirement contributions. However, they do not cover optional benefits that a company may choose to provide.

How accurate is a payroll calculator?

This global payroll calculator is designed to accurately reflect the cost of payroll in every country. However, the laws relating to payroll components do change from time to time, so it is possible that some recent changes may not be accounted for.

How does a global payroll calculator help with reporting and analytics?

Global payroll calculators can be used to produce reports on the potential cost of hiring employees in different locations. This can then inform reports used by senior leaders to make their expansion and hiring decisions.