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How to pay staff in Europe

What is the easiest way for a UK ltd co to pay staff in Europe?

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What is the easiest way for a UK ltd co to pay staff based in Europe?

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By C Graham
30th Apr 2021 14:55

Complex as it depends on how they are set up - are they on UK paye or do they work more time outside of the UK. Are they resident outside the UK for tax purposes. Have they moved to the EU while still employed.

No straight answer - this might be useful as entirely depends on the circumstances.

https://www.gov.uk/guidance/paying-employees-working-abroad

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By paras007
30th Apr 2021 15:11

Bank Transfer

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By Truecon
30th Apr 2021 15:44

Try using a payroll company from the relating European country, they will know the intricacies of the countries tax requirements, and it will most likely reduce costs.
(This assumes they are non-UK based)

You will only have to transfer funds at the request of the payroll processor.

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Replying to Truecon:
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By C Graham
30th Apr 2021 18:29

I've got a feeling the OP means those on their UK payroll?

A lot of companies over the last 12 months have had workers move to eg Italy but were on their UK payroll. Various reasons but as lockdowns meant wfh became the norm, many workers have relocated having no need to be in or near an office in the uk and Ibiza was more appealing than Ipswich. The duration outside of the UK needs to be taken into consideration.
If however the worker is permanently based outside the UK then there is no advantage in keeping them on a contract of employment since it is meaningless if the worker is resident elsewhere for tax purposes. Possible to pay gross using an NT code and not require NI contributions to be deducted.
At that point if they are resident outside the UK an employment contract has no value legally. They can register for tax in that location and become responsible for their own domiciled tax and social security.

If the employer has an office in the country where the worker is based then agree with Truecon that setting up a local payroll agent would ensure social security, healthcare etc are paid and deductions to the relevant tax depts in that location. They will then tell you what to pay.

I recall we had a client with an office in Berlin pre-Brexit and one employee. they needed to close it down when the related work ceased. We used local payroll agents but had to prove we had tried to find the employee another role in the company - even though the Berlin operation consisted of just her.

Holiday rules will also vary as public holidays will be different to those in the UK.
It's a situation that is likely to be more common as the remote working becomes more accepted. But various questions need to be asked.

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Replying to C Graham:
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By paul.benny
03rd May 2021 11:50

Quote:

I've got a feeling the OP means those on their UK payroll?

With no respect to C Graham, we just don't know that. The needlessly anonymous OP has given us the barest minimum of information and hasn't been bothered/has been too busy to come back and respond further.

The question might refer to paying local employees working in their home country. Or it might mean UK citizens who have temporarily or permanently relocated (which each have different answers). Or doubtless many other scenarios.

And, OP (if you do bother to read and respond), "easiest" isn't necessarily best nor is it necessarily compliant. Having employees in other countries can give rise to rights for staff and obligations for employers.

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By Hugh Simpson
30th Apr 2021 23:00

Euros?

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