Understanding payroll’s last mile: Delivering time-critical global payments compliantly
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The “last mile of payroll” or “last mile” payment is a phrase used to describe the final step in the payroll process—when wages or salaries are delivered to the employee after any deductions have been made. It is one of the most important but complex parts of the payroll process as all payments need to be accurate, compliant, and delivered on time.
What drives payroll payment complexity?
For businesses that employ staff or contractors globally, it can be operationally cumbersome to manage cross-border salary payments, due, in part, to the large number of transactions that have to be accurately processed. Payments also need to be delivered according to varying deadlines across different time zones, sometimes in different data formats. The risk of errors is high. In the UK alone, payroll errors impacted 25% of employees in 20241 and according to a study by LexisNexis Risk Solutions, 14% of cross-border payments fail on average globally2. Adhering to different employment, tax and payment regulations across multiple countries is another major challenge.
In an attempt to do this successfully, companies have to implement robust, sophisticated teams and systems that help HR departments calculate their employees’ payroll deductions, manage tax and legal requirements, and assist with insurance and accounting.
Statutory payments—such as taxes, social security, sick pay, maternity/paternity pay, redundancy pay—and lodgements (submission of financial or tax-related documents to a regulatory body), also need to be made on time in each jurisdiction.
Given that cross-border payments can often incur high bank fees and hidden foreign exchange costs, the entire payment process becomes costly, time-consuming and resource-heavy.
Three best practices for simplifying cross-border payroll transactions
Managing multi-country payroll will continue to be a challenge for HR & payroll teams in 2025. Some organisations will choose to outsource this process, and partner with payment providers that are specialised and experienced in the delivery of last mile payments. Here are three key considerations* to keep in mind:
- Timely and efficient payment routing: Does your payroll payments provider have access to multiple payment rails? Payments need to be routed in the quickest and most efficient way in order to minimise the risk of deductions (which are often incurred due to ongoing currency fluctuations, bank fees and other hidden charges). Having access to multiple rails means funds can be delivered efficiently and reliably, with limited delays or rejections.
- A focus on compliance: It is vital to work with a payments partner who understands the country-specific payroll & payment requirements and regulations—failure to do so can lead to non-compliance fines, legal penalties, risk of imprisonment and associated reputational damage. Ensure there is a strong commitment to maintaining strict controls and procedures around AML, KYC and sanctions screening, and that payments meet the required compliance standards in both their origin and destination countries.
- Ability to resolve payment issues: Despite best efforts, high-volume global payments are exposed to human error (miscalculations, incorrect details, etc) and other payment or technical issues that will require troubleshooting. Quick response times and knowledgeable customer service teams are vital to resolving delayed or cancelled payments, giving you more peace of mind and limiting potential financial losses, especially during peak payroll periods.
How Ebury supports secure global payroll payments
Built with payroll expertise to simplify the global payment process, Ebury’s Mass Payments Solution ensures payments are delivered compliantly, on time and in full, every time. We route payments quickly and cost-effectively, in a way that ensures minimal risks of deduction.
Underpinned by robust compliance and due diligence, we adhere to strict operational processes to scrutinise the accuracy of each of our transactions. Our risk management procedures are regularly audited and our pre-payment validation tools include multi-level authorisations to reduce payment failures and the risk of fraudulent or unauthorised activity. We ensure client funds are safeguarded and appropriately protected in accordance with required governing regulations.
Let’s start a conversation
Get in touch with our team if you would like to discuss your payroll payment needs and how Ebury can help you.
*For a deeper dive on the 10 key questions you should ask when choosing a payroll payment provider, read our previous blog.
Sources
1. HR Magazine
2. LexisNexis Risk Solutions
Disclaimer
The information provided herein is general in nature and should not be construed as financial or investment advice. The information provided here is not legally binding. The information, data or views expressed here is for the exclusive use of the recipient and is subject to changes without any notice. You may ask the support team or your dedicated relationship manager to provide additional information regarding Ebury products.