Cross-border payroll payouts
Let’s imagine a fictitious platform named PayrollOS. One of their customers is BizCo and BizCo's finance employees need to use the PayrollOS platform to process payroll for BizCo's employees.
| Platform | PayrollOS, a platform offering cross-border payroll payment services to employers, allowing them to pay their employees in another country. |
| Customer | A company / employer who uses PayrollOS to process payroll for employees. Example customers featured in this guide include BizCo and MarCo. |
| Employee | The employee that BizCo / MarCo uses PayrollOS to send payroll payments to. |
Specific requirements may apply based on the jurisdictions to which you want to deliver services. Always speak to a member of the Airwallex team if you are considering implementing our Global Treasury solution.
Funds flow
The diagram below shows the funds flow for a platform looking to integrate with Airwallex's Global Treasury solution for Cross-border Payroll payouts.
The steps in the flow of funds are described in more detail below. Note that you can potentially initiate multiple operations at the same time - our teams will help you understand the options available in more detail.
Fund the Wallet
Each of customers’ connected accounts, e.g., BizCo's connected account, needs to be funded in order to power payroll and/or tax payouts. This can be done through a number of different methods:
- Global Accounts and bank transfer: PayrollOS can create unique virtual account numbers in the name of BizCo for each currency BizCo operates in. BizCo can then send funds over local and SWIFT payment rails into the Wallet from their external bank. There are no limits to how often customers can fund their connected account Wallets in this way.
- Linked Accounts and direct debit: PayrollOS can complete a one-time linkage of BizCo's external bank account to their connected account with Airwallex. This allows funds to be pulled in over direct debit, avoiding the need for BizCo to ‘push’ funds from their bank account to Airwallex. Please note that applicable limits are in place to mitigate the risk of direct debit recalls.
Convert funds and manage FX risk [Optional]
If funds need to be paid to employees in a different currency to the funds held in the Wallet, BizCo can specify a source currency in the Wallet to be converted. This allows for payroll payouts to be made in more than 50 currencies globally.
- FX rate transparency: We recommend that platforms bill their customers based on the final FX rates achieved. To accommodate fluctuations in FX rates, platforms can collect a buffer (such as a deposit or larger direct debit) from companies to prevent disruptions in the payroll process. Airwallex will be implementing ongoing enhancements to streamline the orchestration of FX conversions within a payroll workflow.
- Monetization: Airwallex's Revenue ControlBETA API can enable platforms to tap into flexible monetization models for cross-border money movements, for example, marking up FX conversions.
Process payouts
In this integration model where payroll payouts are funded by BizCo and other customers, funds will move from each of customers’ connected accounts to the external bank accounts of the employees who are receiving the payroll, over Airwallex’s payout rails.
- Payouts: Trigger payouts to employees using Airwallex's Payout APIs. Airwallex's network of local clearing systems supports payouts to employees in multiple countries and currencies, with country-specific delivery time taken into consideration to ensure the payouts arrive in employees’ bank accounts on the payroll day.
- Batch payouts: This feature may be used to trigger multiple invoice payouts across currencies and countries as one instruction. Batch payouts can also be funded via Direct Debit.
- Beneficiaries: Airwallex offers the possibility to optionally save beneficiaries for future reference. Beneficiaries should be saved as soon as details become available, to facilitate name screening.