Definition

multi-country payroll outsourcing (MCPO)

Contributor(s): Shaun Sutner

Multi-country payroll outsourcing (MCPO) is the business practice of using software to manage employee payroll operations in numerous countries. MCPO payroll software enables employers with workers in other countries, or in countries other than those covered by a company’s main payroll and core HR system, to provide cloud-based payroll services from a third-party vendor. Employers typically use MCPO software to handle payroll for smaller groups of employees in outlying countries.

Many MCPO software users are small- and medium-sized businesses (SMBs) that want to avoid the overhead of a central payroll system vendor but also want the advantages of a larger system, such as compliance with different countries’ laws, and convenience for workers. MCPO systems can also help ensure that employees are paid promptly -- even by a remote employer -- and conveniently, for example by allowing direct to bank paycheck deposits. For employers, benefits include data management and reporting for compliance and audits, as well as potential integration with their HCM or larger payroll systems if they have them. 

According to some MCPO vendors and users, MCPO systems can help employers retain talented workers by providing easy-to-use mobile user interfaces that enable employees in disparate countries to understand and view all aspects of their paycheck and benefits. Also, MCPO vendors say their software can reduce security risks by centralizing control over payroll data and maintain consistency in payroll services across borders.

Multi-country payroll outsourcing vendors

MCPO system vendors are generally independent companies that market their services directly to employers or form partnership integrations with larger human capital management (HCM) software vendors. Two of the biggest MCPO vendors are ADP, the global payroll and HCM company, and NGA Human Resources, an international HR services and payroll provider. Other significant vendors include: Ascender, Celergo, CloudPay, Excelity, Neeyamo, SD Worx, SGWI, TMF Group and Zalaris, according to the Everest Group IT market research and consulting firm.

SAP, one of the dominant ERP and HCM software vendors, also has integration agreements under which MCPO vendors like Zalaris provide payroll services that tie into SAP’s SuccessFactors Employee Central and Employee Central Payroll systems. Workday, an independent HR technology company with its own HCM and payroll systems, has similar deals with a number of MCPO vendors, including ADP, Ascender, Celergo, CloudPay and Excelity.

This was last updated in February 2018

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