Payroll

Payroll clients use Nium financial services to help them as part of their overall payroll management services such as paying salaries, benefits, and expense reimbursement. Payroll clients typically have their own payroll management software, and Nium primarily provides the payments capability to facilitate funds movement for the money to be paid to the workforce.

The target segments for Nium payroll clients can be broadly categorized into two categories:

• Payroll Platform Providers
• Corporations Paying Salaries to Their Employees

Payroll Platform Providers

These are primarily technology companies and start-ups who have built modern payroll management software that automates the management of payroll services such as salary, benefits, expenses, and tax payments for their customers to easily pay their workforce and tax authorities. These Global Payroll Platform companies charge their customers a fee for the software-as-a-service that they provide.

This model typically works for global companies with local entities who perform the hiring, but would like to outsource the HR functions such as payroll, benefits, tax deduction, reporting, etc.

The local entities of the global companies are legally the Employer.

The companies contract Global Payroll Platforms as their agent to pay their employees and handle compliance activities, such as tax payments.

For non-FI Payroll Platform Providers, their business customers need to be onboarded to Nium One platform with due diligence done on the business customers. For these Payroll Platform Providers, eKYB for onboarding their business customers facilitates a seamless onboarding experience. NOTE: Non-FI Platforms cannot make payments on behalf of their customers to the employees.

Client Setup for Non-FI Payroll Platform

Flow of Funds for Non-FI Payroll Platform

Steps for Non-FI Payroll Platform

1. Payroll Platform’s Customer (who is the legal Employer) approves payroll within Platform’s software by a cut-off date to be included in the upcoming payroll cycle run. Payroll Platform calculates employees payroll and any withholding taxes to be paid to the local tax authorities. Payroll Platform books FX trade at Lock FX on behalf of the customer with Nium, and advises funding requirements to their Customer.
2. Payroll Platform’s Customer provides funding through one of the following:
   • Pushing funds through bank transfer into their account with Nium.
   • Authorizing funds to be pulled from their bank account into their account with Nium through Direct Debit
3. Nium executes any FX trade from funding currency to the payout currency.
4. Nium executes payout to:
   • Customer’s local employees for salary payment in local currency with the necessary purpose code, net any withholding taxes.
   • Local tax authorities for tax payment in local currency with the necessary references passed in the payment to the tax authority. This can happen independent of the salary payment at pre-determined schedule, example monthly, quarterly, etc.

NOTE: The remitter name in the payout instruction to the employee is that of the corporate customers since they are the legal employer.

Corporations Paying Salaries to Their Employees

These are corporates with direct relationship with Nium. Typically they have their own payroll management software but is looking to integrate to financial service providers like Nium who can help them with funds movement for paying their employees. An example of these companies is a corporate who already has Netsuite integrated into their internal systems, and they are looking for a global financial service provider like Nium to help them with payouts to their global workforce dispersed in different countries.

This model typically works for global companies who do not have local entities for hiring in the required markets. The Payroll Platform Provider hires and pays their employees as the sole legal Employer of Record, and who contract out their employee services to their customers. Payroll Platform Provider as the EOR is not making payments on anyone’s behalf but is paying its own employees.

Client Setup for EOR Payroll Model

Flow of Funds for EOR Payroll Model

Steps for EOR Payroll Model

1. Platform’s Customer reviews payroll within Platform software by a cut-off date to be included as part of the upcoming payroll cycle run. Payroll Platform calculates the employees payroll and any withholding taxes to be paid to the local tax authorities. Payroll Platform books FX trade at Lock FX with Nium and advises funding requirements to their Customer. Payroll Platform’s Customer provides funding through one of the following:
   • Pushing funds through bank transfer into Payroll Platform’s bank account.
   • Authorizing funds to be pulled from their bank account into the Payroll Platform’s bank account through Direct Debit
2. Payroll Platform transfers funds from their bank account to their account with Nium.
3. Nium executes any FX trade from funding currency to the payout currency.
4. Payroll Platform instructs Nium to perform payout to:
   • Their local employees for salary payment in local currency with the necessary purpose code, net any withholding taxes.
   • Local tax authorities for tax payment in local currency with the necessary references passed in the payment to the tax authority. This can happen independent of the salary payment at pre-determined schedule, example monthly, quarterly, etc.

NOTE: the remitter name in the payout instruction to the employee is that of the Payroll Platform Provider since they are the legal employer.