More and more companies across Asia-Pacific are taking a regional approach to payroll, where a central hub coordinates operations. Donald Tsang, our head of corporate services for Greater China, and Jessica Tsang, associate director for Payroll & Visa, examine how this can add significant business value
Managing payroll across different countries can be costly and challenging, especially as local rules and processes vary considerably.
Using a central hub to coordinate regional payroll functions can help overcome these challenges and bring consistency. It also allows nimbler business plans when expanding into other countries or restructuring, for example.
Over the past few years, more companies have used external service providers to run multi-jurisdiction payroll across the Asia-Pacific region.
But previously, many preferred to keep payroll in-house, or used different service providers to manage HR functions in each country. Now, the trend is for one service provider operating from a single hub. In Intertrust Group’s case, this is Hong Kong.
This shift may be partly due to the Covid pandemic. As workforces become more virtual, companies increasingly take a regional approach, instead of looking at operations country by country.
A holistic approach can add significant business value. Rather than seeing payroll as a commoditised service that just happens each month, this involves listening to the client’s needs. Helping a business achieve its objectives may include creating bespoke reports, liaising with government departments and even helping with visa applications.
Involving anything from different tax rates to complicated social contribution systems, multi-jurisdiction payroll can be complex. Some countries charge a withholding tax, others don’t. And rules and processes for hiring employees vary from country to country.
Governments can introduce new taxes or change regulations rapidly. This was especially evident during the pandemic, when some governments introduced subsidies for struggling businesses.
Companies often expand into several jurisdictions at the same time. For example, a technology firm may open offices in Tokyo, Hong Kong and Singapore simultaneously. Allocating resources quickly to acquire local HR and payroll knowledge in each country can be difficult
Intertrust Group recently helped a US hedge fund that wanted to expand into Hong Kong, mainland China, Singapore and Japan within 18 months.
We set up its payroll in Hong Kong, then replicated this in the other jurisdictions, with Hong Kong the central contact point.
This allowed the client’s New York team to talk seamlessly to our Hong Kong team while cost-effectively rolling out new policies to the regional offices.
Another client had a different goal. Previously part of a large IT firm, the business had been sold to another company. So it was moving to a new HR system at the same time as restructuring its Asia-Pacific presence.
We helped the company become independent, setting up its own payroll infrastructure and creating reports to assist with the restructuring plan.
Our regional payroll service is suitable for smaller enterprises as well as large multinationals with a regional presence. Our biggest client operates across four jurisdictions in Asia-Pacific, with 2,000 employees.
We believe this trend towards outsourced payroll service providers – combined with a regional approach – can only accelerate.
Our one-stop-shop solution provides an end-to-end HR and payroll service for clients who value a single contact point for Asia-Pacific.
From Hong Kong, our expert team helps businesses mandate their regional payroll administration. This includes:
Our bespoke approach goes beyond the operational aspects of payroll services. We work with companies to understand and achieve their goals, from recruiting talent to enhancing productivity.
For example, a retail client may wish to track when its salespeople check in and out. We can gather this data and generate tailor-made reports for management analysis.
Another company may need help organising a work visa for an employee relocating to Hong Kong. Our knowledge of rules in the region means we can help clients prepare for bringing in talent from overseas.
We can also provide ad-hoc support, such as applying for Hong Kong’s Employment Support Scheme.
Our Asia-Pacific payroll team works hand-in-hand with our other corporate services such as tax compliance and accounting. In addition, we can liaise with government departments over tax or labour issues.
Meanwhile, our Employee Self Service (ESS) system offers full HR management functions. This software allows employees to log into their account on any internet-enabled device – such as their mobile phone – to view their payroll history and apply for annual leave. This both enhances employee experience and reduces administration.
Visit our website for more information and to talk to our expert team in Hong Kong today