The era of viewing global payroll as a mere back-office administrative task is over. In the current market, it has evolved into a treacherous compliance minefield, a catalyst for retention crises, and a persistent financial leak for the modern enterprise.
Writing for The Fintech Times, Papaya Global CEO Eynat Guez discusses why the traditional payroll model is reaching a breaking point.
Imagine a Friday morning. 5,000 employees across three continents log into their bank accounts expecting their monthly salary. For your London team, it’s there. For your developers in Buenos Aires and your support staff in Lagos, the balance reads zero.
This is more than a simple technical glitch; it’s a compliance shutdown. And in 2026, it’s becoming the silent killer of global business.
For years, multinational companies viewed global payroll as a back-office administrative task… a box to be checked. That complacency is now a liability.
In 2024, global regulatory fines related to payment and compliance failures soared to a record-breaking ~$19.3 billion, but the financial cost is just the tip of the iceberg. The real damage is being done to the psychological contract between employer and employee.
2025 has seen us witnessing the “Great Payroll Reset,” where the infrastructure of how we pay people is cracking under the weight of a borderless workforce.
Here is why global payroll is the most dangerous blind spot in your organization, and how the world’s smartest companies are fixing it.
1. The external threat: The compliance minefield
If you think “paying people” is simple, you haven’t looked at the regulatory landscape of 2025. Governments are no longer just watching; they are hunting.
The era of the “digital nomad” grey zone is over. Tax authorities globally have synchronized their data sharing, and their primary target is worker misclassification.
- The shift: In 2025, the U.S. Department of Labor and the EU’s Platform Work Directive aggressively narrowed the definition of an “independent contractor.”
- The consequence: What you would have called a “contractor” in January may have been legally classified as a “full-time employee” by June. The result? Retroactive taxes, social security payments, and massive fines.
- The shadow payroll trap: It’s not just about who you hire, but where they go. A sales director spending three months in France “working remotely” can accidentally trigger a permanent establishment risk, making your entire company liable for French corporate tax. This is “shadow payroll” risk – and 49% of global companies have already faced penalties because of it.
85% of compliance professionals report that regulatory complexity has increased significantly in the last 12 months. This is no longer a checklist; it is a moving target.
2. The financial threat: The “invisible pay cut”
For your remote workforce, the greatest thief is currency volatility.
In the borderless economy, we often peg salaries to the U.S. Dollar, but employees live in local realities. 2024–2025 were brutal for emerging market currencies, creating a phenomenon I call “The Invisible Pay Cut.”
Consider a senior engineer in Nigeria. In 2024, the Naira devalued by roughly 43% against the dollar. If you paid them a fixed salary in local currency, you effectively slashed their purchasing power in half overnight. If you paid in USD, you would have absorbed the volatility and transfer fees, but they would still face conversion hurdles on the ground.
This volatility turns payroll into a roulette wheel. Employees in high-inflation zones (like Turkey or Argentina) are spending their workdays refreshing exchange rate apps instead of working, terrified that their salary will lose 10% of its value before they can spend it.
The fix? Forward-thinking companies are now using split payments—depositing a portion of wages in stable currencies (like USD or USDC stablecoins) and the remainder in local currency for immediate expenses.
3. The internal threat: The trust deficit
We often talk about “Employee Experience” (EX) in terms of wellness apps and Zoom happy hours. We forget the foundation: The paycheck.
When payroll fails, trust evaporates. It’s the only touchpoint that matters 100% of the time to 100% of your workforce.
- The retention cliff: According to recent workforce data, 44% of employees will start looking for a new job after just two payroll errors.
- The tmotional Toll: For a remote worker in a volatile economy, a three-day payment delay isn’t an inconvenience; it’s a crisis. It means missed rent, unpaid school fees, and immediate financial anxiety.
You cannot build a “culture of trust” if your payment infrastructure says, “We don’t care enough to get this right.”
4. The future: “Streaming” wages
The bi-weekly pay cycle is a relic of the 1950s. The future of global payments is continuous, flexible, and borderless.
In 2026, the competitive advantage will belong to companies that treat payroll as a product, not a process.
- On-demand pay (EWA): The “streaming” of wages. Employees access money as they earn it, not when the calendar dictates. This is becoming standard in the gig economy and is moving upstream to white-collar roles.
- The rise of the EOR: Employer of Record platforms are the new “Global HR OS,” acting as the legal shield that absorbs compliance risk while enabling instant hiring in 150+ countries.
- Crypto-native rails: While controversial, the use of stablecoins (like USDC) for cross-border payroll is exploding because it bypasses the slow, expensive SWIFT banking network, delivering money in seconds, not days.
Global payroll is no longer just about math. It’s about dignity.
Global payroll is about respecting the contract between the talent that builds your business and the organization that rewards them. The companies that win in the next decade won’t just be the ones with the best culture or the highest salaries. They will be the ones that can answer the simplest question in business with total confidence:
“Can I pay my people – on time, compliant, and in full – anywhere on Earth?”
If your answer is “maybe,” you’re already behind.
Addressing the $19.3 billion regulatory landscape, Papaya Global reframes global payroll from a burdensome administrative cost into a strategic framework of risk mitigation and financial predictability. By deploying an AI-powered compliance engine that monitors worker classification in real-time across 160+ countries , the platform acts as a comprehensive legal shield that assumes the underlying liability for your workforce, effectively shifting the risk of misclassification and shadow payroll away from the enterprise.
To counter the unpredictability of currency volatility and the hidden costs inherent in traditional banking , Papaya utilizes proprietary payment rails—developed in partnership with tier-one institutions like J.P. Morgan and Citi—to offer flat-fee pricing and guaranteed same-day land dates for 95% of payments. This infrastructure further eliminates the operational drag of “spreadsheet hell” by consolidating all employee types and contractors into a single “Workforce OS”. This provides the CFO with a single General Ledger (GL) file and a unified source of truth for total global spend, facilitating faster month-end closes and delivering the real-time visibility required for accurate financial forecasting.
Eynat Guez is an Israeli technology entrepreneur and executive. She is the CEO and co-founder of Papaya Global, a workforce management and payments provider that is the first Israeli unicorn led by a woman. Eynat has over 20 year of experience in global workforce management, and she is one of the leading experts in HR and payroll Management in the industry.
