Challenges that companies are facing-
The world is getting smaller and smaller, and the advent of global mobile workers has enabled businesses to get the most out of their talent where they need it most, but at the same time,there are various challenges that companies face in managing executive compensation like total people cost reporting, pay equity reporting, gender pay reporting, etc.
Equity award taxation is particularly complex and can vary widely depending on the type of award, organizational structure, recipient tax attributes, and location. Moreover, this complexity is further aggravated by new compliance and reporting requirements.
Companies are tackling these challenges in a variety of ways. Some people want to bury their heads in the sand and hopeto not receive notifications of violations. Others know that these issues need to be addressed, but don't know how to get started. Even the most aggressive businesses can fall into the trap of repeating what has happened in the last few years, rather than adjusting the process to new regulations.
The reason behind this chaos-
Keeping the procedure up-to-date and compliant is not easy. Companies face high costs in terms of both money and human resources. Many organizations fail to have a dedicated comprehensive compliance plan that includes maintaining the strength of the internal benchesto collect and update information, obtaining the tools needed to collect data and managing salaries in all jurisdictions where employees are located. Companies have a hard time identifying and focusing on the right resources needed to create and execute the whole process. In addition to this, with new regulations releasing almost every day, centralizing and coordinating information in real-time becomes a difficult battle
How automation can revolutionize the whole process?
Automated programs can help businesses tackle many of the challenges associated with taxing global equity plans. The automated software allows you to place all stock compensation and payroll information from across the company in one place, rather than being distributed across different offices and jurisdictions. Automated tools leverage transactional data and cross-border travel information to use data from jurisdictions around the world to calculate real-time tax withholding for mobile employees in your organization. By doing so, companies can avoid high fines, year-end scrambling, time-consuming payroll revisions and revised W-2s. And because global compliance requirements are changing rapidly, you can pivot and adjust your tax estimates to meet new regulations by automating withholding.
Automated solution programs can betailored to the size of your company and scaled accordingly. In the long run,the cost of adopting an automated solution is inferior to the monetary and intangible costs of non-compliance.
