How to Pay Your International Employees with Talenox’s Multi-Currency Payment Feature

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Managing payroll for international employees can be daunting, especially if you’re an HR manager or SME owner unfamiliar with multi-currency payments. But don’t worry—Talenox’s new multi-currency payment feature makes this process a breeze. In this guide, we’ll walk you through everything you need to know to start paying your international employees quickly and efficiently.

Disclaimer: The information provided in this article is based on our research at the time of writing and may not reflect the most current details. For the latest and most accurate information, please visit the websites of the respective companies or contact them directly. This will ensure you have the most up-to-date data regarding their multi-currency payment options and fee structures.

Why Multi-Currency Payments Matter

First, let’s talk about why multi-currency payments are essential. If you have employees working in different countries, paying them in their local currency can:

1. Save Time and Reduce Hassle: No need to deal with multiple services or complicated currency exchanges.
2. Ensure Fair Compensation: Employees receive their salaries without significant losses due to conversion rates.
3. Improve Employee Satisfaction: Timely and accurate payments in local currency boost morale and trust.

The Rise of Remote Work and International Employees

 

Remote work has grown exponentially in recent years, and with it, the need for effective multi-currency payroll systems. According to a survey by Global Workplace Analytics, remote work has grown by 159% since 2005. In Singapore, a study by Enterprise Singapore found that 83% of SMEs plan to increase their remote workforce over the next two years.

Moreover, HSBC’s Expat Explorer survey revealed that 45% of expatriates in Hong Kong and 37% in Malaysia receive their salaries in a currency different from their home country. These statistics highlight the increasing need for seamless multi-currency payroll solutions.

Real-World Example: A Singaporean SME Expanding Abroad

Consider a Singaporean SME with employees in Malaysia and Hong Kong. Before adopting Talenox, this company faced some challenges, including higher-than-expected fees for currency conversion and delays in payments. Let’s explore why this might happen as we look into the current practices for multi-currency payments in Singapore.

Current Practices for Multi-Currency Payments in Singapore

In Singapore, many companies manage multi-currency payments through a combination of traditional bank accounts and newer fintech solutions. Here’s an overview of the most common methods and their associated fee structures:

Traditional Bank Accounts

 

Many businesses continue to use multi-currency accounts (MCAs) from major banks due to the strong reputation and trust these institutions have established over the years. Multi-currency bank accounts (MCAs) allow companies to hold and manage funds in various currencies, facilitating international transactions without needing multiple accounts. Depending on the bank chosen, some key features and fees may include:

• Bank A: Supports 12+ major currencies with competitive exchange rates, no minimum balance requirements, and a fee of SGD 2 for paper statements.
• Bank B: Allows holding funds in 8+ foreign currencies with linked debit cards for spending. Bank B offers competitive interest rates but requires a minimum balance of SGD 5,000 for certain accounts​.
• Bank C: Supports 11+ different currencies and offers free withdrawals from the bank and partner ATMs. However, it requires a minimum opening deposit of SGD 100 and charges fees for transactions and withdrawals beyond partner banks.

Fintech Solutions

 

Fintech platforms like Wise (formerly TransferWise), Revolut, and YouTrip have surged in popularity due to their lower fees and favourable exchange rates. Additionally, their convenient mobile apps and intuitive user interfaces enhance the overall user experience. These companies typically offer:

• Wise: Known for offering competitive mid-market exchange rates with fees starting from 0.33% per transaction. Wise allows you to hold over 40+ currencies foe free and allows free ATM withdrawals up to SGD 350 monthly​.
• Revolut: Provides foreign currency transfers at interbank exchange rates with no charges for standard users up to a certain limit. Premium, Metal, and Ultra plans offer higher limits and additional benefits​.
• YouTrip: A multi-currency wallet offering competitive rates and no fees for currency exchange, making it a cost-effective solution for frequent international transactions​.

Most companies in Singapore currently use a mix of traditional multi-currency bank accounts and innovative fintech solutions to handle international payrolls and other cross-border transactions.

While banks offer comprehensive MCA services, and platforms like Wise and Revolut provide very competitive rates and low fees, there are some potential downsides or risks to consider.

Potential Downsides

Traditional banks and fintech solutions like Wise and Revolut each have their own potential downsides when it comes to handling multi-currency payrolls. Banks may sometimes have higher fees for currency conversions and international transactions, which can reach up to 3-5% (but  note that their rates can also be highly competitive during promotions)​. In addition, they might have slower processing times, sometimes taking several days for international transfers​. Additionally, banks may be less flexible due to their verification procedures for setting up and managing multi-currency accounts​.

On the other hand, fintech solutions, while offering low fees and faster processing times, come with their own set of challenges. Some users have reported issues with delays in responses for customer support. Compared to traditional banks, these platforms also operate primarily online, lacking widespread physical branches for in-person services​. Additional fees for services such as weekend currency exchanges and cash deposits can also impact cost efficiency​.

Why Talenox’s Multi-Currency Payment Feature May Suit You

In comparison, a platform like Talenox, which integrates direct multi-currency conversion and payment, offers advantages by keeping fees low, automating currency conversion, and ensuring compliance with local regulations for payroll. This integrated approach streamlines the payroll process, making it a more efficient solution for businesses managing international payrolls. 

1. Integrated Platform

With Talenox, you can manage payroll, taxes, and leave management all in one place. No need to switch between different services or platforms as you pay your employees abroad in another currency. This integration ensures that all your payroll calculations are handled accurately and quickly.

2. Competitive Rates

We offer consistently affordable rates. For example, while traditional banks may charge up to 3-5% for currency conversion (aside from promotional rates offered by some banks and financial platforms), Talenox provides competitive rates with minimal fees, saving your business money in the long run. This is especially so when you’re paying salaries consistently every month.

3. Automated Currency Conversion

Say goodbye to the hassle of manually converting currencies. Talenox automatically handles currency conversion, ensuring that your employees receive the correct amount in their local currency. This feature is useful for calculating superannuation or provident funds, including CPF in Singapore, MPF in Hong Kong, and EPF along with other statutory funds in Malaysia.

4. Compliance with Local Regulations

Talenox ensures compliance with local payroll regulations, so you don’t have to worry about legal issues. Our platform is regularly updated to reflect changes in payroll laws, ensuring that your business stays compliant.

How to Use Talenox’s Multi-Currency Payment Feature

Using Talenox’s multi-currency payment feature is straightforward and user-friendly. Here’s a simplified guide to get you started:

1. Add Your Employees

Input your employees’ details into the Talenox database (our ‘Profiles’ module), including their preferred payment currency.

2. Configure Payroll Settings

Set up your payroll settings to include the necessary currencies and payment schedules.

3. Run Payroll

When it’s time to pay your employees, simply run payroll and let Talenox handle the rest. The platform will automatically convert the salaries to the correct currency and ensure compliance with local regulations.

For a visual guide on how the system really works, you may refer to this in-depth article from our Knowledge Centre. 

Frequently Asked Questions (FAQ)

1. Can I pay employees in multiple currencies at once? Yes, Talenox allows you to pay employees in different currencies within the same payroll cycle.

2. How do I know if I’m getting a good exchange rate? Use the rate and fee checker tool to compare rates and ensure you’re getting the best deal.

3. What if my employee’s preferred currency is not listed? Contact Talenox support to inquire about adding new currencies to the platform.

Final Thoughts

Paying your international employees doesn’t have to be complicated. With Talenox’s multi-currency payment feature, you can manage your payroll efficiently and affordably. Embrace the future of payroll with Talenox, and keep your employees happy and paid on time, no matter where they are in the world.