Successfully outsourcing to a new payroll partner in the Middle East requires a little forethought. And the one question you will need to ask is, "How will they help me adapt and scale this business function while remaining locally compliant in an area of the world where there is much change?"
In our article, we will cover the steps to choosing your Middle Eastern outsourcing payroll partner so you can benefit from our payroll expertise in this region.
How to Choose a Middle Eastern Payroll Outsourcing Partner
For the purpose of our discussion, we will break down the process of choosing your payroll services into five vital steps. If you need more clarification or you are looking for service advice, please visit our payroll outsourcing page and get in touch.
Let's start with step number one.
Step 1: Have a clear understanding of your areas of growth
Before you approach any potential payroll outsourcing partners, you need to understand a bit about the region where they will provide services. More than that, you need to appreciate your organisation's global growth plan.
For example, here in the Middle East, there are big differences in employment laws, taxation systems, and labour regulations from country to country. A partner with a specialism in one region will not help you across all of them.
If your growth plan suggests that the whole Middle East is ripe for expansion over the short or long term, you will need a partner to help you plan and execute across borders.
Likewise, if you wish to dominate an existing market, and that means bringing on more staff to do so, having a payroll specialist who can expedite onboarding and payment processing within a region will help.
Step 2: Look for their regional experience and flexibility
For every supplier connection we make, we do our due diligence. In regions of the world like Europe, where many countries have common laws, it can often be a much easier task because of the similarities in approach to compliance. But if you are looking for a payroll outsourcing partner in the Middle East (or other areas of the world), you need to do a bit more digging.
In some areas of the Middle East, economics and politics can be unpredictable, and changes in government policies or economic sanctions can directly impact payroll processes. Your payroll partner should demonstrate flexibility and a strong understanding of regional risks to adapt quickly without disrupting payroll continuity.
How do you look for this? It is worth looking for several information points:
Relevant case studies
Marketing content (like our UAE payroll guide or our How to hire and pay employees in Saudi Arabia)
Client feedback
Any local partnerships that may prove invaluable for staying compliant
Step 3: Assess their compliance and risk management expertise
Good signs of compliance and data protection are crucial in the new partners we choose to work with. This is particularly true for business functions like payroll, where a third party handles sensitive employee and banking information.
Within the Middle East, you will also need to be aware of protocols for data compliance laws like the UAE version of GDPR (Personal Data Protection Law (PDPL), which has requirements for handling employee data securely. You will also need to be mindful of Qatar's unique labour law for expatriates and Saudi Arabia's Saudisation quotas. These are just a few of the local compliance laws your payroll partner will need to work with. And they are being updated regularly.
The best international payroll partner for you is an agency that has systems in place to monitor regulatory changes in real-time, automatically updating their compliance practices to reflect new laws.
How do you test this before you choose your payroll service? You test their knowledge and planning. For example,
● Do they have the proper audit trails and reporting to update you and authorities on compliance transparently?
● Do they have effective and timely communications on legal updates?
● Do they have dedicated local teams for compliance understanding and assurance?
Step 4: Assess their cultural and language adaptability
Here in the Middle East, we have a diverse culture with many language nuances that can impact payroll management if they are not catered for. It makes it vital for employee and employer relations that your payroll outsourcing partner can demonstrate a deep understanding of your people.
For example, Arabic is the official language in most Middle Eastern countries, and having Arabic-speaking payroll specialists who understand local dialects is imperative to bridge potential communication gaps and prevent misunderstandings. However, Arabic is just one language to consider. Other local dialects and languages—such as Kurdish, Persian, and Turkish—may also be necessary, depending on the country and workforce demographics.
Those who offer a cultural sensitivity to their workflows and processes also allow for empathy and local etiquette that signals respect at the right time during things like payroll issues. This same approach also builds trust, which helps retain and engage staff.
In our opinion, to do this, you need a payroll team on the ground. While much can be done electronically, face-to-face services are still the best way to ensure your glocalisation approach. "Glocalisation" is a term coined to express a branded continuity in service provision with local nuance.
Step 5: Understand their tech and customisation capabilities
As your business plans for growth, your system choices must be made with scalability in mind. This means looking for payroll services with the tech behind them to scale with you.
Key questions to ask your potential payroll provider might include:
● How easily can we scale our service plan, and what steps do we need to take?
● How quickly can you introduce payroll to nearshored or offshored regions?
● How quickly can you pivot from operations in one area to another?
Integration is also something you will need. Ask potential partners if they can integrate payroll systems with your HR, finance, and Enterprise Resource Planning (ERP) platforms. It might also be worth exploring if your partner can provide all of it, giving you an operational advantage. We have certainly found that this approach benefits our clients.
Then, there is the customisation of your payroll system. How easy is that? For example, in the Middle East, benefits and allowances vary greatly, especially for expatriate employees. A payroll partner whose system is customisable can tailor your payroll to accommodate benefits like housing allowances, transport benefits, or education reimbursements, ensuring compliance with both company policy and local regulations.