How do I do payroll for my employees?

Running payroll means doing the same five things everywhere and doing them differently in every country. So how do you actually run payroll?

Start with what is universal, because the structure holds whether you employ in Paris, New York, London or Istanbul.

Register as an employer with the relevant authority before your first hire. This step has to happen first, and processing times mean it cannot be done the week someone starts.

Classify the worker correctly. Employee or independent contractor is a legal determination, not a preference, and getting it wrong is the single most expensive payroll mistake in every jurisdiction.

Calculate gross pay, including base salary, overtime, bonuses and any contractual supplements.

Withhold at source. Income tax, social contributions and any statutory deductions come off before the employee is paid. The employer holds that money temporarily on behalf of the state.

Remit and report. The withheld amounts go to the authorities on a defined calendar, with declarations that vary from monthly to quarterly.

That structure is stable. What changes between countries is substantial.

Who pays what, since the split between employer and employee contributions varies enormously. The rates themselves, which differ by factors rather than margins. The payslip, mandatory and highly detailed in some jurisdictions, minimal in others. The reporting calendar, and the statutory entitlements around leave, notice and termination.

Four jurisdictions illustrate that range well: France, with the heaviest contribution structure, the United States, where federal and state layers stack, the United Kingdom, with its real-time reporting system, and Türkiye, with its own registration and declaration framework.

In this article we cover the universal process first, then each country in turn.

The Payroll Process Step by Step

Seven steps repeat every pay period, in this order.

1. Register as an employer before your first hire
2. Classify each worker correctly
3. Collect the information you need from them
4. Calculate gross pay for the period
5. Apply withholdings and deductions
6. Pay the employee and issue the payslip
7. Remit contributions and file declarations

The first step cannot be rushed. Employer registration takes days or weeks depending on the jurisdiction, and you cannot legally pay anyone before it completes.

The second step carries the most risk. Employee versus contractor is determined by how the working relationship actually functions, not by what the contract says.

Authorities in all four countries examine control, integration and economic dependence. Misclassification produces back contributions, penalties and interest, usually calculated retroactively across the entire relationship.

The third step is administrative but blocks everything downstream. You need identification, tax identifiers, bank details and whatever declarations your jurisdiction requires before processing the first payment.

The fourth step covers gross pay: base salary, overtime at statutory rates, bonuses, commissions and contractual supplements.

The fifth step is where jurisdictions diverge most. Withholdings cover income tax where applicable, social contributions, and any mandatory insurance. The split between employer-paid and employee-paid varies enormously by country.

The sixth step has a documentation requirement attached. Most jurisdictions mandate a payslip with specific content, and several require you to retain copies for years.

The seventh step carries the deadlines that generate penalties. Contributions go to the authorities on a defined calendar, with declarations that run monthly, quarterly or in real time depending on where you employ.

Missing these is the most common and most avoidable payroll failure.

Running Payroll in France

France operates the heaviest contribution structure of the four jurisdictions covered here, and the employer carries most of it.

Employer contributions run between 25% and 45% of gross salary depending on pay level, sector and the reductions that apply. Employee contributions sit around 22%, withheld at source.

That split matters for budgeting. A gross salary of 3,000 euros costs the employer considerably more, while the employee receives considerably less.

The main employer rates for 2026 give a sense of the structure.

Health insurance at 13% on total salary, family allowances at 5.25%, capped pension at 8.55% up to the social security ceiling and uncapped pension at 2.11% on everything. Unemployment insurance at 4.05%, plus a workplace accident rate set individually by the authorities according to your sector’s risk profile.

Supplementary pension contributions through Agirc-Arrco come on top, at 4.72% on the first bracket.

One change defines 2026. The RGDU, a single degressive reduction, replaced the previous Fillon reduction and the reduced-rate bands. Headline rates now appear at full level in declarations, with the reduction applied separately.

Payroll software had to be updated before January payslips, and this is the detail foreign employers most frequently miss.

Three obligations are strict.

The DSN, a monthly nominative declaration, is mandatory and entirely digital regardless of company size. Paper filings are refused outright.

The payslip is highly regulated, with seven mandatory sections and both employer and employee contributions displayed in full.

Income tax is withheld at source by the employer, using a rate supplied by the tax authority for each employee.

France also layers substantial statutory entitlements on top: paid leave, notice periods and collective bargaining agreements that frequently exceed the legal minimum.

Running Payroll in the United States

The US carries a far lighter employer burden than France, with the complexity sitting elsewhere: in the layering of federal and state obligations.

Employer payroll taxes add roughly 7.5% to 10% on top of gross wages, against 25% to 45% in France. That difference reshapes hiring economics entirely.

Three federal taxes apply.

Social Security at 6.2%, paid by both employer and employee, on wages up to the 2026 wage base of $184,500, raised from $176,100. Maximum withholding per employee is $11,439, matched dollar for dollar.

Medicare at 1.45% each, with no cap. An additional 0.9% is withheld from employees earning above $200,000, paid by the employee alone.

Together these form FICA at 7.65% per side.

FUTA, federal unemployment tax, is employer-only at 6.0% on the first $7,000 of wages. Most employers receive a state credit of up to 5.4%, bringing the effective rate to 0.6%, or roughly $42 per employee annually.

Then the complexity arrives.

State unemployment tax is set individually by each state, experience-rated on your claims history, with wage bases ranging from $7,000 to over $78,000 depending on jurisdiction.

State income tax withholding varies, with some states charging none and others operating their own brackets. Several cities add local taxes on top.

Four requirements structure the process.

An EIN from the IRS before your first hire, plus registration in each state where you employ someone.

A W-4 from every employee determining federal withholding, and an I-9 verifying work eligibility.

Form 941 quarterly reporting federal taxes, with deposits on a monthly or semi-weekly schedule.

A W-2 issued to every employee annually by the end of January.

Running Payroll in the United Kingdom

The UK sits between the US and France on employer cost, with a reporting system that is unique among the four.

Employer National Insurance runs at 15% on earnings above a secondary threshold of £5,000 per year. That rate rose from 13.8% in April 2025, while the threshold dropped from £9,100, which increased payroll costs substantially for most employers.

Add pension auto-enrolment, where a minimum 8% total contribution applies with at least 3% from the employer, and your real on-cost sits around 18%.

Employee deductions run through PAYE, covering income tax and National Insurance together.

Income tax applies in bands for 2026/27: nothing on the first £12,570, 20% to £50,270, 40% to £125,140 and 45% above. Scotland operates its own bands, flagged by a tax code prefix.

Employee National Insurance runs at 8% between £12,570 and £50,270, then 2% above.

One mechanism distinguishes the UK entirely.

Real Time Information requires you to report to HMRC on or before every payday, not monthly or quarterly. The Full Payment Submission goes in with each payroll run, and late submissions trigger penalties.

No other jurisdiction covered here demands this frequency.

Four deadlines structure the year, which runs from 6 April to 5 April.

The FPS on or before each payday. PAYE and NIC payment by the 22nd of the following month. A P60 to every employee by 31 May. A P11D for benefits in kind by 6 July.

Two reliefs are worth knowing. Employment Allowance offsets up to £10,500 of employer NI for eligible businesses. The Apprenticeship Levy at 0.5% applies only above a £3 million pay bill.

Running Payroll in Türkiye

Türkiye carries one of the heaviest employer burdens in the region, with a mechanism that catches foreign employers off guard.

Employer SGK contributions run at 23.75% of gross at the standard rate, following a pension sub-rate increase in January 2026. Employers with no overdue SGK debt qualify for a two-point discount, and manufacturing for five points.

Add 2% employer unemployment insurance on top.

Employee deductions cover 14% SGK, 1% unemployment, income tax and stamp tax at 0.759%.

Both sides calculate on gross earnings up to the SGK ceiling, set at nine times the minimum wage, which reaches 297,270 TRY monthly in 2026. Salary above that carries no social security but remains fully taxable.

Income tax runs across five cumulative brackets: 15% to 190,000 TRY, 20% to 400,000, 27% to 1,500,000, 35% to 5,300,000 and 40% above.

Two features distinguish Turkish payroll.

The minimum wage exemption removes the portion of every salary equal to the minimum wage from income tax and stamp tax. A minimum wage earner therefore nets exactly 85% of gross.

The cumulative calculation is the one that surprises foreign employers most. Income tax accumulates across the year, which means an employee’s net pay falls in later months as they cross into higher brackets.

Staff accustomed to flat monthly deductions find this genuinely confusing, and it is worth explaining at hiring rather than in October.

For reference, the 2026 minimum wage sits at 33,030 TRY gross and 28,075.50 TRY net, costing an employer roughly 40,214 TRY monthly.

Reporting runs monthly through the MUHSGK declaration, combining withholding and social security in one filing.

Should You Run Payroll In-House or Outsource It?

The answer depends less on company size than on how many jurisdictions you employ in.

When in-house makes sense

In-house works when you operate in a single country, your team structure is stable, and someone internally owns payroll as a defined responsibility rather than as something squeezed between other tasks.

Modern payroll software handles calculation, payslip generation and filing competently in most single-jurisdiction setups. The cost stays flat as you grow, which makes the economics increasingly favourable with headcount.

What you keep is control and speed. A salary change, a new hire or a correction happens immediately rather than through a service request.

When outsourcing makes sense

Outsourcing works when you employ across borders, when rules change faster than you can track them, or when nobody internally has the time to own the process properly.

The four jurisdictions covered here illustrate the problem. France introduced a new contribution reduction mechanism in January 2026. Türkiye raised its employer pension rate the same month. The US Social Security wage base moved. The UK held its rates after already shifting thresholds the previous year.

Keeping four systems current is a job, not a task.

What you gain is capacity rather than convenience. A provider operating across your countries already maintains expertise you would otherwise build four times over.

The point providers rarely emphasise

Outsourcing does not transfer your legal liability.

In most jurisdictions, the employer remains responsible for correct withholding and timely remittance regardless of who processes the payroll. Your contract may give you recourse against the provider, but the authority still pursues you.

Treat a provider as capacity, not as insurance.

Three questions that settle it

How many jurisdictions do you employ in? One favours in-house, several favours outsourcing heavily.

Who owns payroll internally? If the honest answer is nobody, you have already outsourced by default, to whoever has the least time.

What would an error cost? Back contributions, penalties and interest compound quickly, and in several countries personal liability attaches to company directors.