2025 brings more complexity for CFOs managing payroll across several countries. New tax rules, changes in local labor laws, and changing data privacy requirements make compliance harder to maintain. Even small payroll mistakes can quickly lead to fines or trigger audits.
So, how do you ensure cross-border compliance? This CFO global hiring guide gives concise, practical advice and essential updates on Global Payroll Compliance 2025.
Key Regulatory Changes in 2025
Governments have updated income tax rules, social contributions, local labor laws, and payroll-related thresholds that directly impact net pay, employer liabilities, and payroll system configurations.
Country-Specific Tax Updates
Here is a look at key tax changes for global employers.
United States
In the United States, employers must follow Federation and State levels of law.
- Higher Social Security wage base: The IRS raised the Social Security wage base to $174,600 for 2025, up from $168,600 in 2024. Employers must update payroll systems to stop deductions once an employee reaches this limit.
- State income tax increases: California, New York, and several other states have raised marginal rates for top earners. Employers must update withholding tables to reflect these changes.
- Inflation-adjusted deductions and credits: For the tax year 2025, the federal standard deduction is $15,000 for singles, $30,000 for married filing jointly, and $22,500 for heads of households.
United Kingdom
The UK introduced several changes that affect tax liability and employer contributions, with additional complexities for Scottish payroll:
- Increased National Insurance thresholds and rates: Employer NIC costs have risen due to a lower threshold and higher rate. The employer contribution now applies from £417/month (down from £758/month) at an increased rate of 15% (up from 13.8%), raising payroll costs across most employee bands.
- Scotland’s revised income tax bands: From April 2025, Scotland introduced a new 48% top rate above £125,140, and modest increases to lower bands:
- 42% rate starts at £43,663 (previously £43,662)
- 45% rate starts at £75,001
Source URL- https://husys.com/blogs/global-payroll-compliance-2025-cfo-guide/
