Running payroll used to be simple.
You hired people locally, paid them through one system, filed taxes in one country, and moved on with your life.
That world no longer exists.
Today, founders and hiring leaders are building teams across borders by default. Talent lives everywhere. Opportunity is global. And payroll has quietly become one of the biggest operational risks inside modern companies.
If you get it wrong, you do not just annoy your team. You risk fines, compliance issues, delayed payments, and broken trust.
This guide walks through the best way to run global payroll in 2025, what most companies get wrong, and why platforms like Deel have become the backbone of serious global teams.
Why Global Payroll Is So Hard (And Why It Keeps Getting Worse)
Hiring globally sounds great on paper.
Lower costs. Better talent. Faster scaling.
Then reality hits.
Each country comes with its own:
Employment laws
Tax structures
Benefits requirements
Termination rules
Reporting obligations
Multiply that by five, ten, or twenty countries, and payroll stops being an administrative task. It becomes a legal and financial minefield.
Most companies struggle because they try to solve a global problem with local tools.
That never works.
At LoftyHire, we partner with platforms that solve global hiring and payroll at scale. Deel is one of the tools we recommend for companies building international teams.
The Three Traditional Ways Companies Try to Run Global Payroll
Before we talk about the best way, let’s be honest about the options most companies start with.
1. Paying Contractors Directly
This is the most common early-stage approach.
You wire money via Wise or PayPal and call people contractors.
The problem:
Many “contractors” are legally employees
Misclassification risk is massive
Governments are cracking down hard
Fines can hit years later
This approach feels cheap and fast until it becomes very expensive.
2. Setting Up Local Entities
This is the “grown-up” solution most founders think they need.
You open a legal entity in every country where you hire.
The problem:
It is slow
It is expensive
It requires local lawyers, accountants, and payroll vendors
It locks you into countries even if hiring needs change
This makes sense for large enterprises. It is overkill for most modern teams.
3. Using Patchwork Payroll Vendors
Some companies stitch together:
A PEO in one country
A payroll provider in another
An HR tool on top
A finance tool to reconcile everything
The problem:
No single source of truth
Data mismatches
Manual reporting
High operational overhead
Payroll becomes something your team fears touching.
What the Best Global Payroll Setup Actually Looks Like
The best way to run global payroll today has three characteristics:
One platform
Built-in compliance
Flexibility to hire anywhere
This is where modern global payroll platforms come in.
Instead of building infrastructure country by country, you use a system that already has it.
That is the model Deel operates on.
What Deel Is (In Simple Terms)
Deel is a global payroll and compliance platform that lets you hire, pay, and manage workers in over 150 countries.
You can:
Hire employees without opening local entities
Pay contractors compliantly
Automate payroll, taxes, and benefits
Stay compliant with local labor laws
Scale without rebuilding systems
For founders and hiring leaders, Deel removes payroll from the list of things that keep you up at night.
Why Deel Works Especially Well for Modern Teams
Deel is not just a payroll tool. It is infrastructure.
Here is why it fits the way companies actually operate now.
1. You Can Hire Without Opening Entities
Deel acts as the Employer of Record in countries where you do not have entities.
That means:
Deel legally employs the worker
You manage day-to-day work
Deel handles compliance, taxes, and local rules
This is ideal for:
Startups
Distributed teams
Companies testing new markets
Teams hiring one or two people per country
You get speed without legal exposure.
2. Contractor and Employee Management in One Place
Most teams have a mix of:
Full-time employees
Contractors
Consultants
Deel supports both, inside the same platform.
You can:
Generate compliant contracts
Pay in local currencies
Track invoices
Convert contractors to employees when needed
This matters because teams evolve. Your payroll system should not break every time your hiring strategy changes.
3. Built-In Compliance, Not Compliance Theater
Many tools say they help with compliance. Few actually do.
Deel handles:
Local employment contracts
Statutory benefits
Tax withholdings
Termination requirements
Ongoing regulatory updates
This is critical. Labor laws change constantly, especially outside the US.
Unless you enjoy reading foreign labor codes at midnight, you want this handled for you.
4. Payroll That Finance Teams Can Actually Trust
Global payroll often breaks at the finance layer.
Currencies. Exchange rates. Reconciliation. Reporting.
Deel provides:
Consolidated payroll reporting
Clear audit trails
Predictable costs
Finance-friendly exports
This keeps your CFO happy, which is never optional.
Most founders underestimate this.
Payroll mistakes do not fail loudly at first. They fail quietly, then catastrophically.
Common outcomes:
Employees paid late
Incorrect tax filings
Government penalties
Forced back payments
Legal disputes
Worse, it damages trust with your team. Once people stop trusting payroll, morale drops fast.
The cost of prevention is always lower than the cost of cleanup.
When Deel Makes the Most Sense
Deel is not for everyone. That is a good thing.
It is best suited for:
Companies hiring internationally
Teams scaling beyond one country
Founders who value speed and compliance
Hiring leaders who do not want payroll complexity
If you are only hiring locally in one country and never plan to expand, Deel may be unnecessary.
If you are building a global team, it becomes hard to justify not using it.
How Global Payroll Fits Into Hiring Strategy
This is where LoftyHire’s perspective matters.
Hiring and payroll are not separate problems. They are tightly linked.
Bad payroll limits hiring options.
Good payroll expands them.
When payroll is solved:
You can hire faster
You can hire better talent
You can hire globally without fear
You can focus on performance, not paperwork
Platforms like Deel enable better hiring decisions because they remove artificial constraints.
Common Objections We Hear (And the Reality)
“It’s expensive”
Compared to what?
Opening entities, paying lawyers, managing risk, and fixing mistakes costs far more.
Deel replaces entire layers of overhead.
“We can do this ourselves”
You can. Until you cannot.
Most companies switch after their first serious payroll or compliance issue.
“We only have a few international hires”
That is exactly when tools like Deel are most valuable.
You get enterprise-grade infrastructure without enterprise complexity.
Global Payroll Is Now a Competitive Advantage
This is the part most companies miss.
The ability to hire globally, compliantly, and fast is not just operational. It is strategic.
Companies with modern payroll infrastructure:
Access wider talent pools
Move faster than competitors
Reduce risk
Build trust with employees
Payroll is no longer back-office. It is part of how you win.
Do Not Overcomplicate This
Running global payroll does not need to be heroic.
The best setups are boring, predictable, and compliant.
That is exactly what you want.
If you are serious about building a global team, the smartest move is to use a platform designed for it from day one.
Deel is one of the few tools that actually delivers on that promise.
Get Started With Deel
If you want to explore Deel for your team, you can learn more here:
Whether you are hiring your first international employee or scaling a fully distributed team, getting payroll right early will save you time, money, and stress later.
That is a trade worth making.