We can’t share client names, but we can share success stories.
Here’s three case studies that show how Celergo simplifies global payroll.
1. DIVESTITURE FROM PARENT COMPANY
Situation. Spun out from its parent organization, a services company chose Celergo to manage its international payroll operations in more than 20 countries. Previously, the parent company had consolidated these activities at a regional level.
Challenge. Like many newly divested companies, our client did not have sufficient internal resources or expertise to support international payroll on their own. Due to the sun-setting of limited support from their former parent, they had a tight timeframe to transition payrolls in the initial seven countries to Celergo’s systems.
Solution. The expedited timing required intense concentration and coordination between teams from the client and Celergo to ensure we captured and deployed all data. We developed an action plan to ensure a quality payroll transition and guided the client through the necessary steps:
- Set Up Entities. With a divestiture, the spun off company needs to create a new entity in each country before payroll processing can occur.
- Changed Benefits. New entities may have smaller populations than the parent company and, therefore, could have difficulty replicating current benefit structures. If employees do not accept the benefit revisions, it may delay payroll launches. European populations have a particular sensitivity to such benefit changes.
- Registered for Tax and Social Programs. Once established, entities must register for tax and local social programs. This sometimes lengthy process can delay a payroll launch or cause penalties.
- Harmonized Payrolls. Divestitures offer the opportunity to standardize payroll processes across multiple entities and countries, as well as consolidate pay dates to optimize timing.
- Deployed New Time Reporting and HR Systems. Often, new technologies support the new organization. Launches of these systems often share the same extreme time pressure and limited resources as the payroll launch team. Periodic review of such interfaces with an eye towards cost vs. benefit can help prioritize resources and action steps to ensure the client completes the most important tasks on time.
Results. Celergo’s significant expertise with divestitures helped this client through the transition, overcoming the unique issues found in each country. After the initial smooth launch of payrolls in seven countries, we took over management of the client’s payrolls in more than a dozen other countries and continue to service them as of this writing.
2. RAPID INTERNATIONAL EXPANSION
Situation. A technology company undergoing rapid international expansion selected Celergo to manage payrolls in each new country it entered.
Challenge. The client had no prior presence in most locations, opening greenfield operations that required hiring employees and full payroll setups in each new market, with limited in-house Human Resource expertise to manage the expansion.
Solution. Celergo supported this client through the payroll setups, from company registration as a payroll entity, to social insurance registration, to full payroll processing. We also provided local payroll expertise, helping them with new hire forms and paperwork requirements, local employee social insurance registrations, education on statutory withholdings and local compliance requirements, and disbursement advice and support.
Results. By partnering with Celergo, the client reduced their start-up time and improved their compliance in new locations. As of this writing, Celergo continues to work hand-in-hand with this company to provide worldwide payroll expertise and management as it continues to expand internationally.
3. EXPATRIATE CONSOLIDATION
Situation. A manufacturer selected Celergo to manage its expatriate workforce to improve compliance, reduce complexity, and provide understandable pay slips to its expatriate employees.
Challenge. Most companies struggle with expatriate payroll administration. Expatriate compensation packages may require cash delivery in the home, host or in both locations, which compounds tax filing and payment requirements, as well as social program contributions and benefit deductions. Due to this complexity, a lot of our competitors won’t touch expat payroll. They don’t have the expertise – or the will – to execute globally.
Solution. Celergo doesn’t avoid something just because it’s difficult. We utilized a special technique to separate tax payrolls at both the home and the host locations from the cash compensation received by the expatriates. This unique set-up allowed Celergo to manage all the inputs to expatriate compensation, including interfaces from benefit providers, relocation providers, internal accounting, and human resources. By doing this, we assembled the expatriate compensation packages for delivery and calculated applicable taxes in the home and host locations.
Celergo created online pay slips that recorded the amounts delivered in the various currencies and bank accounts worldwide. We managed the compensation calculations and delivered split payments to employees in multiple jurisdictions and currencies.
Upon completion of the expatriate cash payrolls, additional income data, such as expenses paid on behalf of the expatriates, were sorted for host tax calculation. Celergo managed the host tax calculation process to ensure the appropriate information was included and the host taxes generated were captured for home reporting. These host taxes were then included in the home tax calculation for countries which tax on worldwide income.
Result. By managing these payrolls in the proper sequence, we captured the proper data and calculated taxes in an efficient and timely manner, which almost completely eliminated the need for year-end adjustments and payments by the client. By employing this unique approach to expatriate payroll, the client increased its compliance, improved its data integrity, and consolidated all its expatriate payroll data to support worldwide income tax reporting.