A payout refers to a type of transaction companies make to various stakeholders. It most often applies to payments made to employees as part of payroll.
Common forms of payout include electronic payments, like mobile and wire transfers.
Payout doesn’t necessarily only have to refer to salary – it can also apply to bonuses and commissions, for example.
What is a payout ratio?
A term related to payout is payout ratio. It’s basically the percentage of a company’s earnings that go to payouts — i.e., payments made to stakeholders.
How do payouts work?
Payout processes will differ depending on how the funds are being transferred. In general, though, there are a few common steps:
- Providing the payment information
- Payment information verified by payment processor
- Payment transferred to employees or recipient’s account once verified
- Fees and charges may be deducted along the way
Payouts for a global workforce
With differences in regulations, cross-currency considerations, and time-constraints, it can get very difficult streamlining the payout process for a global workforce.
Companies with employees across the globe must ensure they have top-notch compliance knowledge that is always up to date and technology that can manage deadlines and differences apparent in each country.
One way to meet both these needs is through partnering with a payments distribution platform that is able to supply local expertise across multiple jurisdictions, as well as automation capabilities.