How can I pay my employees working abroad remotely?
Hiring someone abroad is easier than ever, but paying them is where things usually get complicated. Many companies assume they can simply add a new team member to their UK or Dutch payroll and wire the money. In reality, that’s rarely legal and almost never compliant.
Every country has its own rules around payroll, tax, social security and employment law. So the real question is not can you pay someone remotely. It’s whether you can do it in a way that meets local regulations.
Below are the three most common ways companies pay overseas employees, including the risks and the easiest compliant solution.
1. Direct Remote Payment (But be aware of the risk)
You can technically pay someone abroad from your home country. The issue is that in many places this does not make them a legal employee under local law which makes it not compliant.
This means they may:
- Miss out on mandatory local benefits
- Not be protected by local labour law
- Become responsible for handling their own taxes and social security
- Face issues with insurance or future mortgage applications
At the same time, your company might face non compliance penalties or accusations of creating a permanent establishment without the proper registrations. So while direct payment looks simple, it usually creates more problems long term and is something we would never recommend!
2. Setting Up Your Own Entity
If you plan to hire a full team in a new country, setting up your own entity can be a good move. But for most companies, it’s a big step.
Think of:
- High setup costs
- Local tax registrations
- Payroll systems
- Corporate bank accounts
- Ongoing admin and compliance
It’s a solid option only when you have long term hiring plans in that market. For one or two employees, it’s expensive and slow.
3. Using an Employer of Record (EOR)
This is the most popular solution for global hiring right now. An Employer of Record becomes the legal employer in the employee’s country, while you stay in full control of their work, projects and performance.
An EOR handles everything locally
- Payroll
- Taxes
- Social security
- Employment contracts
- Compliance
- Local registrations
It gives you a fast and fully compliant way to pay someone overseas without opening a legal entity. You get the talent, they get the correct local employment protections and the government gets the right filings.
This is exactly why so many companies choose partners like Parakar. With local teams on the ground across Europe, Parakar ensures that your employees are paid correctly and safely under local law. You focus on growing your international team and we take care of the administrative and legal side.
Want to Pay Someone Overseas in a Compliant Way?
If you want to hire abroad without dealing with registrations, payroll setups and legal paperwork, an EOR is the easiest path. Parakar helps companies expand internationally with peace of mind, offering compliant employment and payroll support in every country we operate in.
Ready to hire someone overseas? Reach out and our local experts will walk you through your options.
