Outsourced payroll services

Time & cost savings

If managing payroll internally, your accountants would have to cover salary calculations of both in-house and nearshore/offshore development teams. This means hiring and training additional workforce to handle the workload. On top of that, your payroll experts would have to learn the specifics of the foreign payroll rules, regulations, tax system, etc., to stay compliant.

Getting external payroll services, on the other hand, can help you cut costs by avoiding the need to recruit more payroll experts. Instead, you’ll pay a fixed monthly fee for a bundle of accounting services. Plus, it frees up time for your internal team to prioritize core financial activities. 

Compliance & risk mitigation

When hiring developers abroad, it’s vital to ensure your tech business follows all the local laws, especially regarding payroll and taxes. Cooperating with a local outsourced payroll provider can shield your company from legal issues and fines. They know the ins and outs of the local tax laws, salary and wage regulations, and compliance requirements, constantly staying updated on any changes.

Data security

Payroll deals with sensitive employees’ information like social security numbers, paychecks, and bank details, which can make tech entrepreneurs reluctant to opt for payroll processing outsourcing. However, trusted payroll vendors prioritize security, investing in cloud-based servers, data centers, and cybersecurity software. This ensures maximum protection from embezzlement, identity theft, and other risks.

Effective scalability

Those tech companies looking to rapidly expand their development team abroad often encounter growing and complex payroll needs. Using outsourced payroll for tech companies helps handle workforce fluctuations, changing benefit plans, and evolving tax requirements. The right payroll management outsourcing services scale with your growth – from recruitment and onboarding to ongoing HR administration and reporting. This approach has been embraced by notable tech companies like People.ai, BigCommerce, ThredUP, Sift, and Dotmatics when expanding dedicated development teams abroad.

Inaccuracy & errors

There are cases when vendors delegate payroll management to junior staff without proper monitoring and review of their work. As a consequence, payroll calculation errors, payslip discrepancies, and incorrect deductions may occur, resulting in salary delays for your engineering sector. When opting for payroll compliance outsourcing, make sure your vendor has a professional team of accountants with extensive experience in managing global payroll and a multilevel accounting check. 

Extra expenses 

Some payroll processing outsourcing firms may charge extra for services like offboarding or benefits management and/or add costs for additional services that your company doesn’t necessarily need, leading to overspending. To keep a lid on expenses, it’s wise to team up with payroll processing companies that operate on a pay-as-you-go basis. This way, you only pay for the services you actually use.

Delayed response time 

Working with a third-party vendor isn’t always smooth sailing, as there are lots of things to negotiate to sync up both parties’ processes. Maintaining fruitful communication and dealing with urgent matters as soon as possible can be tough, especially with possible time differences. Therefore, opt for professional payroll vendors who offer a key account manager to navigate you through payroll, legal, and other operational matters.

It all begins with identifying your payroll needs and selecting the right outsourced payroll company. Then you’ll get initial consolations, covering services, pricing model, pay frequency, cooperation terms, timeframes, guarantees, and other details.

Once the terms are agreed upon, the payroll service provider collects employee data, sets payroll schedules, configures tax withholding preferences, and establishes secure access for the client to input or review payroll information. From there, the provider starts payroll processing and other tasks outlined in your contract. Most service providers also offer ongoing outsourced payroll support, reporting, and analytics.

Keeping payroll management in-house means extending your team with experts who possess in-depth knowledge of the payroll, tax, and compliance specifics of a particular country. This results in additional labor spending. Meanwhile, an outsourced payroll support company already has experienced specialists who are well-versed in the intricacies of the local market and have up-to-date knowledge of the latest trends and practices in the field.

Payroll and compliance outsourcing also increases the chances of keeping your payroll error-free as opposed to in-house payroll. Complying with all the local norms can be tricky and time-consuming, sometimes resulting in overspending or fines if done incorrectly.

On the flip side, keeping payroll functions in-house grants more control and allows for instant alterations in case of policy updates or restructuring. However, getting payroll outsourcing solutions liberates your team from work overload, allowing you to focus on strategic tasks.

Managing payroll abroad means juggling local regulations, taxes, and fast-changing rules – especially when hiring remote employees/contractors or operating in multiple jurisdictions. Here’s what tech companies usually face:

• Poland: You’ll choose between employment and B2B. Sick leave, benefits, and tax credits shift by contract type, so the same engineer ends up with a different net.
  – ZUS (SSC) filings: DRA/RCA/RSA/RZA monthly;
  – Annual PIT-11 to employees;
  – PIT-4R/8AR to the tax office;
  – Sick pay split: employer pays first 33 days (14 if 50+), then ZUS benefit;
  – Meal benefit tax/SSC rules: employer-financed meals/vouchers have defined caps.

• Romania: Social contributions are split, and payroll records are strict. Miss a monthly submission, and you’ll fix it for the whole financial year.
  – Unified D112 (PIT + CAS + CASS) monthly by the 25th with electronic submissions;
  – IT/construction tax facilities when criteria met;
  – Meal vouchers & benefit caps;
  – E-payslips: obtain employee consent for electronic distribution.

• Ukraine: FTE and contractor routes are adjacent to Diia.City rules. Reports still need to land on time, while reimbursements continue to be processed for your team members.
  – Monthly “Tax Calculation” (PIT + military levy + SSC) due by the 20th; moved from quarterly to monthly in 2025;
  – Diia.City gig contracts handling.

• Bulgaria: Several social funds and benefit floors apply. A small salary tweak can trigger new withholding and extra administrative work.
  – Declarations 1 & 6 (social insurance + income tax) to the NRA monthly, typically by the 25th of the following month;
  – Social insurance goes to NSSI; health to NHIF.

• Mexico: Statutory extras like aguinaldo (common for LATAM) and vacation premium are added to base pay. Local wage garnishments add another layer to the run.
  – CFDI 4.0 payroll receipts for each pay;
  – IMSS & INFONAVIT calculations/payments; SUA files for social security;
  – Aguinaldo & PTU (profit sharing 10%; legal caps & May 30 payout window).

• Colombia: Prima and severance funds are mandatory. Contractors and employees contribute differently, which changes your file.
  – PILA for social security + Parafiscales (SENA 2%, ICBF 3%, Cajas 4%);
  – Prima mid-year & December;
  – Electronic payroll to DIAN.

• Argentina: Strong CBAs shape overtime and the 13th salary. Currency handling can ripple through payout timing for distributed teams.
  – Monthly F.931 social security return;
  – Aguinaldo/SAC: 13th salary paid in June and December; each installment is 50% of the highest monthly wage from the prior 6 months.

• Chile: Pension and health split across agencies. Miss an update and you face back-pay and rework.
  – AFC unemployment insurance; typical employer 2.4% (3% for fixed-term);
  – Monthly payroll/tax reporting to SII on set deadlines.

With outsourced payroll support, you can drop the guesswork, and stay compliant across borders. Legal payroll outsourcing services handle filings, benefits, reimbursements, and wage garnishments, ensuring your remote team gets paid right so you can keep building.

Tech payroll lives at the intersection of sprints, mixed contracts, and cross-border rules. Engineers switch between FTE and B2B, equity vests mid-cycle, and both nearshore and offshore teams expect the same clarity as HQ. That’s where a focused partner helps. With outsourced payroll support, you keep pay runs aligned to sprint calendars, handle bonus spikes without reruns, and close months on time.

An experienced provider standardizes your outsourced payroll processing across countries, so overtime rules, PTO, and benefits don’t turn into different playbooks for every location. And with modern outsourced payroll management services, finance gets clean exports, audit trails, and role-based access, while managers see exactly what changed and why. The result: accurate, compliant payroll that feels simple.

• Qualification & experience: Choose a vendor with experienced payroll and legal professionals in the tech industry. Also check out their case studies, client reviews, and testimonials.
• Pricing structure: Consider payroll processing service providers with predictable pricing and detailed invoices to avoid hidden fees and, therefore, eliminate the risk of overpayment. 
• Technology & security: Check if your vendor uses modern payroll software, applies security protocols and encryption standards, and complies with data privacy regulations to safeguard employee information.
• Guarantees: If your vendor provides compensation for mistakes or missed deadlines, has outlined timeframes, and offers pricing transparency, they are a green flag.

No business growth is possible without a powerful team of A-players. And, in order to legally employ such software developers, some tech companies see only two possible solutions:

• establishing their legal entity and managing the employment, payroll, tax payments, and compliance on their own 
• or outsourcing these operations to multiple vendors. 

The good news is that there is a viable alternative: an Employer of Record (EOR) service that allows tech businesses to employ talented software developers without setting up a legal entity or managing all the necessary operational support.

What you get with Alcor’s EOR for tech service

Alcor provides an Employer of Record service in Latin America and Eastern Europe. Unlike other EOR vendors, we focus on the technology field, possessing niche knowledge of recruiting and employing senior, lead, and C-level software developers on the best terms. We handle everything from HR payroll, onboarding, and employee termination to tax payments, legal compliance, documentation, and employee benefits management.

We guarantee:

• 100% compensation for fines caused by our mistake
• 40% cost reduction in comparison with outsourcing
• 100% transparency, with direct salaries instead of rate cards
• Key account manager to assist you in all matters
• No third parties, as we do everything in-house
• 2.5 years is the average tenure of our hires