The Final Mile of Global Payroll:Integrating Statutory and Tax Payments

International payment systems have made significant strides in recent years to speed up transactions, reduce costs and remove friction. Thanks to a combination of regulatory push to harmonise domestic or regional payments into real-time settlement as well as privately backed innovation across wallets and digital currency, cross-border payments are in a better place than ever. They're not, however, where they need to be for all use cases.

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The "final mile" payments gap

As any enterprise payroll, treasury, or compliance officer can tell you, payments systems are largely only capable of paying out net salaries or directly to contractors - and even then there are huge gaps in coverage and crucially quality. But there they stop. The crucial "final mile" of statutory and tax payments for payroll remains completely unaddressed.

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This is a considerable problem. After all, global payroll isn’t complete until authorities are paid and mandatory data requirements met. 

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So what can payroll providers and large multi-national corporates do to meet these crucial commitments? 

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The state of statutory and tax payments 

Until now, the only approach possible has been to turn to a spiderweb of separate providers to manage the associated statutory and tax payments and administration for each operational jurisdiction - and sometimes multiple per jurisdiction. 

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However, this approach is far from perfect. For one, there's the compliance risk that comes with a fragmented, country-by-country model and associated late or failed payments and regulatory exposure. There's also the inefficiencies inherent in maintaining multiple partners and multiple flows of funds. Finally, there's an alarming lack of visibility into everything from validations to payments status to proof of payment that can make it a challenge to provide authorities with the data and dollars (although other currencies are of course available) they need in a timely manner. 

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And then there's the fact that as the number of jurisdictions an organisation operates in goes up, so too does the difficulty of addressing these challenges. Different countries maintain different tax brackets, tax breaks, and allowances, all of which must be considered when coordinating salary and contractor payments - not just by country but often by state or even district. Similarly, compliance documentation required by regulators differs from one location to the next, adding to the administrative burden. 

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Fortunately, however, things are set to change, and in a big way. For the first time ever, payroll providers, multinationals, and enterprise platforms can manage all statutory data requirements alongside payment processing in a single unified platform. Finally, the complexity and risk associated with statutory and tax payments for payroll and pensions are set to go. 

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Integrating "Stat & Tax"

Navro’s Statutory & Tax is the first service available globally to integrate statutory tax and payments obligations alongside payroll and pension payouts into a single, compliant flow with real-time visibility and proof of payment across markets.

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Compliance-first automation with consolidated flows to authorities, downloadable Proof of Payment, and complete visibility greatly reduces the regulatory or financial risk stemming from late or failed payments or through audit and reconciliation delays. That means fewer hoops for the finance team to jump through and fewer nasty surprises. 

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An integrated payments platform comprising pre-run validations, local rails, and curated partner coverage to meet country requirements also means that the payroll team can track everything in one place. That puts an end to fragmented rails and manual workflows, eliminates bank detail errors, and means that no more time is wasted on managing disparate portals and processes. 

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For treasury teams, meanwhile, our integrated approach delivers consolidated flows and improved success rates, fewer returns and fees, and improved predictability around working capital. At a stroke, challenges around pre-funding pressure, FX leakage, and unpredictable failures are put to bed. 

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Facilitating frictionless growth

At a higher level, what this all means for businesses is equally impressive. Thanks to the Statutory & Tax service, payroll providers, Employer of Record platforms, and multinationals alike will be able to expand into new markets far more easily, removing the need to add local bank accounts or providers. The service facilitates growth by removing the last remaining barriers to frictionless payments. 

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The benefits will also show up in better relationships with employees, contractors, and partners. Reduced failure rates and accelerated investigations and reconciliation means that payees will receive their pay or pensions on time, every time. 

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A truly global solution

Navro's Statutory & Tax service is, like all our capabilities, only possible because of the years of effort that have gone into building a global payments infrastructure capable of managing large volumes of incoming and outgoing transactions in multiple jurisdictions alongside the associated compliance requirements. As a result, we can provide a truly global reach with enterprise-grade transparency: 140+ currencies, 200+ territories, and 80+ same-day/real-time markets via local rails when needed.

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We are hugely excited by this latest innovation and what it will mean for the payroll service providers and Employer of Record platforms we work with, as well as for enterprise users with in-house payroll teams. 

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Global payroll isn't complete until statutory and tax obligations are handled. Now, with salaries, statutory, and tax payments brought together in one compliant flow inclusive of validations, real-time status, and proof of payment, organisations can do just that and scale far more easily as a result. With the "final mile" gap now bridged, the global cross-border payments system has taken another huge step forward. 

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