Managing payroll is more than just paying your team—it’s the backbone of your business operations. Whether you’re handling payroll in-house or outsourcing, it’s a constant necessity that keeps everything running seamlessly. When you’re dealing with international payroll, especially across borders, it can get even more complicated.
Malaysia’s payroll system is similar to many other countries, but does have its own unique differences—especially when it comes to benefits, taxes, and jurisdiction. Beyond managing payroll, you also need to consolidate multiple payroll systems for better efficiency and accuracy, which adds another layer of complexity. For startups and even established businesses, navigating these differences can be challenging and time-consuming. In fact, 26% of organisations struggle with managing payroll differences across borders.
Managing multiple payroll systems in-house is doable, but with 31% of payroll teams finding it challenging to integrate different software systems, is that really the best use of your time? Managing payroll differences is laborious, and your focus might be better spent on growing your business, not dealing with compliance. Therefore, people turn to Employer of Record (EOR) providers, which offer services commonly used to eliminate this issue and other matters involving international expansions, such as
- easing market entry,
- reducing setup costs and risks, and
- managing global workforce.
EOR acts as your local partner, legally hiring and handling employees on behalf of your business. You will still maintain a bird’s-eye view of all the activities related to your workforce, without the need to worry about local administrative tasks.
Partnering with an EOR provider can streamline your payroll processes and lighten your business setup load. But not all EORs are created equal—we have listed these six crucial qualities when choosing an EOR to manage your Malaysian payroll:
1. Proven Track Record
Before partnering with any EOR provider, doing your homework can save you time and trouble in the future! Their track record, such as the number of satisfied clients, success stories, and even their follow-up activities, tells you a lot about how reliable and competent they’ll be as your cross-border partner. You need someone who can handle your Malaysian payroll without hiccups.
2. Centralised Payroll Integration
Effective payroll integration is crucial, but it’s often overlooked. If your payroll systems aren’t integrated, you’ll end up with siloed departments and inconsistent processes between countries. This leads to manual data entry, wasted time, and errors—look for an EOR provider that is able to centralise your payroll system and integrates everything without a glitch.
3. Multi-Country Payroll Management
Your EOR provider should handle the full spectrum of payroll management. They are responsible for tracking and reconciling your team’s compensation, such as:
- Commissions
- Overtime
- Bonuses
- Travel allowances
- Remote working allowances
- Paid time off
- Local benefits
A good EOR provider in Malaysia will be responsible for tracking and reconciling all these payments, integrating them into a single payroll dashboard. This simplifies data entry, tracking, and reporting, so you won’t be duplicating work across different systems.
4. Compliance with Local Laws
Staying compliant with local laws is non-negotiable, especially when the cost of non-compliance keeps rising. Malaysia has recently revised its regulations, such as the Personal Data Protection Act (PDPA) 2010 which have increased its penalties of up to RM1 million or even imprisonment for non-compliant businesses. Your Malaysian EOR provider should have deep expertise in local regulations, handling everything from payroll calculations and tax withholdings to keeping up with changes in the law. This keeps your Malaysian business away from summons, penalties and legal issues.
5. Speed, Agility, and Transparency
Your EOR provider should make your payroll process smooth, giving you a clear view of local costs, taxes, and social security contributions. They should be transparent with the details, offering advice to help you reduce costs and cut through red tape in Malaysia. Since they act as an extension of your business, they should track your Malaysian workforce efficiently, ensuring accurate payments and top-notch talent retention.
6. Reliable Support and Communication
An EOR provider shouldn’t just be a transactional partner; considering they function as part of your business, you need real-time support, no matter the distance and time zone. They should be easily reachable and available whenever you need them, not just during office hours. While many EOR providers in Malaysia only operate within their local time zones, 24/7 support is far more valuable, ensuring your business is constantly taken care of.
Choosing the right EOR partner is crucial for managing payroll in Malaysia smoothly without the need for you to constantly monitor it. You need a trusted partner who not only understands the complexities of cross-border payroll but also provides customised solutions that fit your business’s current and future needs.
At INFINITY8, we specialise in handling Malaysian payroll for businesses like yours. With our HR-accredited experts and 24/7 support, we ensure that your payroll, taxes, and benefits are managed seamlessly. Get in touch with us today for a FREE consultation and see how we can streamline your payroll processes.
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