Frequently Asked Questions
Find answers to frequently asked questions about Payroll and HR services,
PEO, HR outsourcing/EOR and compliance services
If you can’t find the answer to your question, please reach out to us to find your answer!
About Payroll
What are the most suitable payroll services for a global business?
Choosing the most suitable payroll service for a global business is a complex decision that depends on several factors, including the size of your business, the number of countries you operate in, and your specific needs. There isn’t a one-size-fits-all solution, but here are some of the most suitable types of payroll services and top providers to consider.
For a small organization, it’s essential to consider providers that offer a user-friendly interface and built-in HR tools. In contrast, a larger organization requires a robust system with scalable solutions and advanced features. At ITOS, we adapt to our clients’ needs and work with the best teams in Latam to provide a suitable solution for them.
Key factors to consider:
Global Compliance and Expertise: The service must have up-to-date knowledge of local labor laws, tax regulations, and statutory requirements for every country where the business operates.
Centralized Platform: A single, unified system that can manage payroll across multiple countries, offering a consolidated view and reporting.
Multi-Currency Support: The ability to process payroll in different currencies and handle international payments seamlessly.
Integration: The service should easily integrate with other global HR and finance systems (HRIS, ERP, etc.).
Local Support: Availability of customer service and support teams with local language and regulatory knowledge in different time zones.
Data Security: Adherence to international data privacy standards, such as GDPR.
What are the different types of payroll services?
The following types of Global Payroll Services are some of the most common models:
Aggregated Global Payroll:
This approach provides a single point of administrative oversight for a company’s diverse international payrolls. It operates by coordinating a network of local payroll specialists in various countries. The client interacts with a central service provider who, in turn, manages the processing and compliance handled by these in-country partners. This model is well-suited for businesses that need both streamlined management and the benefit of local expertise without the burden of managing each local relationship separately.
Employer of Record (EOR) Services:
Ideal for companies expanding into a new country without establishing a local legal entity, this model involves a third party assuming the role of the legal employer. The EOR handles all official duties related to employment, including managing contracts, tax obligations, and regulatory compliance on behalf of the client. While the EOR manages the administrative and legal aspects, the client retains full control over the employee’s daily work and responsibilities. This is a fast and efficient way to enter new markets or hire remote talent.
Professional Employer Organizations (PEOs):
In a co-employment arrangement, a PEO shares human resources, compliance, and payroll responsibilities with the client. Unlike the EOR model, the client must still maintain its own legal entity in the country of operation. PEOs are a valuable resource for mid-sized companies looking for a partner to alleviate the administrative load of HR management and to gain access to comprehensive benefits packages often available only to larger organizations.
Unified Global Payroll Platforms:
This model utilizes a proprietary, integrated software system to directly process payroll for multiple countries. Instead of relying on a network of third-party providers, the entire process is managed through a single, cloud-based platform. This offers businesses a high degree of control, automation, and real-time visibility into their international payroll data. This solution is generally most appealing to large-scale enterprises that prioritize standardization and deep integration with their existing financial and human resources information systems.
How do outsourced payroll services work, and what are their benefits?
Outsourced payroll services involve hiring a third-party provider to handle payroll tasks like wage calculation, tax filings, and payments.
Benefits include saving time and money, ensuring compliance with ever-changing tax laws, reducing costly errors, and increasing data security. This frees up your team to focus on core business operations.
About PEO and EOR
What is PEO (Professional Employer Organization)?
A PEO is a Professional Employer Organization. PEOs enter into a co-employer relationship with clients, which allows them to share and manage many employer-related liabilities and responsibilities. Companies outsource their human resources to the PEO while maintaining all the other operational aspects of the company. The PEO provides human resources services, employee benefits, and payroll administration.
When you utilize a PEO type service in another country (outside your home country) and you do not have an entity, you are not entering into a co-employer relationship (since you do not have an entity set up). In this case you would be using what is called an Employer of Record (EOR).
What is an Employer of Record (EOR)?
An employer of record (EOR) is the entity in which employees are legally employed (holds the employee contracts). The employer of record relieves you from the burden of having to manage a foreign entity, bank accounts, labor regulations, tax laws, payroll management, and risk management. By using an employer of record in the country where you want to expand, you have a partner already on the ground so you can focus on the core operations of your business.
How can an EOR help my company?
Hiring in another country can be a logistical headache, but an Employer of Record (EOR) acts as a legal shortcut. Think of it as a specialized partner who handles all the official, behind-the-scenes work of employing someone in a foreign country.
The EOR takes on the administrative and legal responsibilities, while you retain control over the employee’s day-to-day work.
It can help a company to:
Accelerated Market Entry: Instead of spending months navigating the legal maze to create a foreign subsidiary, an EOR allows you to bring on a new international team member in a matter of days. This agility is a game-changer for businesses looking to quickly test a new market or hire specific talent without a long-term commitment.
Guaranteed Legal Security: The EOR is an expert in the local regulations of each country. They ensure you’re compliant with everything from mandatory benefits and leave policies to tax withholdings, effectively protecting your company from expensive legal missteps or fines.
Streamlined Operations: All the tedious administrative tasks—calculating paychecks, processing tax filings, and managing benefits like health insurance—are taken off your plate. This frees up your HR and finance teams to focus on strategic work, like company growth and employee development, rather than routine paperwork.
Financial and Resource Efficiency: Establishing and maintaining a foreign entity is incredibly expensive and resource-intensive. By partnering with an EOR, you avoid these upfront costs and the ongoing burden, making global expansion far more accessible and affordable.
About ITOS
In what countries does ITOS provide services?
We provide services in the following countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Trinidad & Tobago, Uruguay, and Venezuela. If there is a country not listed, please reach out to us. Because of our focus on Latin America we have many resources that we can use to help you.
Where are ITOS offices?
We have offices located in Colombia, Mexico, Brazil, and the USA. You can find our addresses and phone numbers here. Additionally we have team members located in Costa Rica, Venezuela, Chile, and Peru.
What industries does ITOS serve?
ITOS has been providing services to multinational companies in a wide variety of industries for almost 15 years. These industries include financial, oil & gas, software, real estate, raw materials, services, energy, utilities, and communications.
Other questions
What is an Administrative Service Organization (ASO)?
Your global growth,
our local expertise
ITOS manages the complexities of local regulations, allowing our clients to focus on their core business. More than a vendor, ITOS is a dedicated partner in our clients’ success.