Vigtige pointer
- Per-trade conversion fees can add up rapidly if you convert each employee’s payment individually as part of multi-currency payroll.
- Batching your conversions so you trade once per currency can reduce costs.
- Note that this factor only applies if you pay fixed or per-trade fees.
- At Payset, there are no flat per-trade FX fees. Our percentage-based, tiered pricing means the more you trade, the better your FX rate can become — without needing to batch conversions.
Why Distributed Payroll Creates FX Costs for SaaS Finance Teams
Paying a remote team can drive up FX costs for a simple reason: employees who are spread across multiple countries often expect payment in their local currency.
One of the largest conversion costs comes if you pay fixed FX fees on every trade. Those fees can add up rapidly if you’re converting each employee’s payment individually, and batching transactions is a direct solution.
Additional costs may come from the fact that individual transactions are often executed at different exchange rates and may require extra effort to manage.
It’s easy for finance teams to miss these costs because they’re not prominent. They’re often hidden deep in a blind spot within payroll transactions.
Making your payroll FX conversions more cost-effective is possible. It’s all about knowing where the cost is and when batch conversions can help.
The Problem With One-Off Spot Conversions for Each Employee
Let’s look at the challenges in detail. Here’s why you might experience higher costs if you manage multi-currency payroll for international employees.
Each Transfer Can Trigger a Fee
The clearest challenge comes with performing a high number of conversions: if your FX provider charges a per-trade fee, you’ll need to pay it on every conversion.
If you’re paying any per-trade fees at all, batching your transactions can help you reduce those fees. It won’t reduce your fees if you pay only percentage-based fees, but it can still reduce costs when you pay a mix of per-trade and percentage-based fees.
Note that you usually can’t combine different currencies into a single FX trade. The opportunity is in combining same-currency transactions if you aren’t already doing so.
Timing Can Affect Your FX Rate
There’s another challenge: if some employees need the same currency, but you convert their payments individually, the exchange rate will vary depending on trading time.
This isn’t just a problem for employees who might receive different rates without explanation. It’s also a problem for payroll teams, who are missing a potential opportunity to time trades when market rates are advantageous.
Batching same-currency transactions ensures the combined conversions happen at the same time, which can help you conduct trades when exchange rates are favourable.
Costs Are Harder to Track and Optimise
Finally, converting each employee’s payment individually makes it difficult to monitor costs, especially if you have hundreds or even thousands of employees.
Batching same-currency FX conversions can help your finance team get a clearer view of its total FX spending. Instead of managing and monitoring a large number of individual employee transactions, you’ll be able to look at just a few currency conversion records.
Once you understand where the costs are, you can also pursue further cost-saving strategies, such as structuring trades to qualify for better FX rates, reducing unnecessary conversions, and switching to a provider with rates that meet your needs.
Estimating International Payroll FX Costs Over One Year
How much might one-off employee payments add to your FX costs?
In this illustration, we assume you pay 100 employees in five currencies monthly with a fee of 1.50 USD per trade. We also assume a 2% margin and annual salaries of 3.5 million USD.
Before consolidation, you’d pay this amount from per-trade fees:
100 employees × 12 months × 1.50 USD = 1,800 USD paid per year
If FX batching allows you to perform one trade per currency, you’d pay this amount:
5 currencies × 12 months × 1.50 USD = 90 USD paid per year
Subtract the numbers to find your savings after batching:
1,800 USD – 90 USD = 1,710 USD savings per year
Note that those fees are separate from the FX margin your provider collects:
3.5 million USD (total salaries) × 2% = 70,000 USD FX margin costs per year
Your total international payroll FX costs would therefore be:
70,000 USD + 1,800 USD = 71,800 USD per year before batching
70,000 USD + 90 USD = 70,090 USD per year after batching
This is strictly an illustration. The exact cost varies depending on the size of your team, your payment frequency, your FX volumes, the number of currencies you use, and your FX provider’s pricing model. You should apply these calculations to your own data.
Batch Conversion vs Per-Employee Conversion: What Changes
If you switch to batched conversions, you can expect certain benefits. It’s important to remember that some benefits may only apply if you’re currently paying fixed fees.
Here are some potential advantages to consider:
- Lower fixed fees: If you currently pay per-trade fees, performing fewer conversions will reduce costs, as shown in the above calculations.
- FX rate consistency: Conversions within a batch will receive the same exchange rate, whereas unbatched exchange rates vary depending on the time of the trade.
- Control over timing: Batching transactions also gives you direct control over when conversions happen, possibly helping you trade when rates are favourable.
- Better cost visibility: Reducing your number of FX trades makes it easier to monitor your FX trading costs. You’ll only need to monitor one conversion record per currency rather than one for every employee you pay.
- Simpler payroll operations: With batching, finance teams can manage fewer FX transactions and potentially speed up payroll workflows.
- More predictable FX costs: Consolidating your FX conversions makes it easier to forecast what you’ll spend on employee conversions because the number of trades no longer depends on the number of employees that you pay.
- Employee payments: Batching FX doesn’t just benefit finance teams. It also ensures that employees paid in the same batch receive the same exchange rate.
Hvordan Payset kan hjælpe
With Payset, your FX rate is based on your trading volume, not the number of trades you make. That means no need to batch conversions just to avoid per-trade FX fees.
Plus, we offer opportunities that could help you save on your FX margin costs. Take advantage of our tiered pricing model to get better rates the more you trade, or use our FX calculator to find what you might pay compared to your current plan.
We also provide bulk payment features that make it easy to pay large teams in a single currency. Pay your staff, suppliers, or subcontractors with just a few clicks.
Sign up with Payset to simplify your SaaS company’s multi-currency payroll operations. Manage up to 38 currencies across 180+ countries — all from a single account.
OFTE STILLEDE SPØRGSMÅL
What’s the best way to manage FX for multi-currency payroll for international employees?
The best way to manage FX for multi-currency payroll is to make sure you’re not paying fees on every trade, including by batching your currency conversions when applicable.
How much does currency conversion cost when paying an international remote team?
The cost varies based on several factors, especially the volume of money you’re sending. We suggest using the calculation in this article to estimate your fees.
Are batch currency conversions cheaper than per-employee conversions?
Sometimes. The most direct savings occur if batching helps you avoid fixed fees on each conversion. However, batching may also help you time your FX trades to receive favourable exchange rates or build a more cost-effective strategy overall.
Does batching transactions solve double conversion costs?
Not necessarily. The cost of paying employees individually is separate from “double conversion” costs that arise from a payment being converted to multiple steps. That’s a similar hidden mechanic that creates costs you should address separately.
Do I need to batch my FX conversions with Payset?
No. Payset uses percentage-based FX pricing rather than fixed fees per conversion. Your rate is determined by your FX trading volume, so you can make conversions when you need them without having to batch trades to avoid fixed per-trade charges.
