Pay international contractors quickly & easily

A rundown of the best options to pay international contractors, as well as the most important criteria to look for when weighing your options.

pay international contractors

Making sure you can efficiently pay international contractors is an essential part of growing your business because it allows you to source the best talent for a given job regardless of that specialistโ€™s location.

To help you get started, review the table below to consider your main options for paying international contractors and what kind of business is best suited to each one.

The best ways to pay international contractors

MethodExamplesProsConsBest For
Payment PlatformsPayoneerCompetitive Fees Multi-currency support Contractor management toolsMonthly subscription costsBusiness owners who make frequent international payments
Freelancer PlatformsUpwork, FiverrEasy to use Integrated project management tools Built-in escrow for securityHigh platform fees Requires contractors to have an accountContractors already working within the platformโ€™s ecosystem
EOR/AOR ServicesPayoneer WFMFull compliance Typically includes tax & payroll supportPlatform limitationsLong-term contractors in need of recurring payments and ongoing tax/compliance needs
Digital WalletsPayPal, VenmoEasy to use/setupFaster paymentsMultiple fees Not universally accepted
Bank TransfersN/AStandalone Easy to useHigh cross-border fees Rarely provides multi-currency supportContractors with compatible banking systems
Wire TransfersWestern UnionTight security Large payment amountsHigher fees Slow speed Not built for recurring paymentsLarge one-time payments

What to look for when paying international contractors

Although the table above details the major categories by which business owners pay international contractors, the nuances of each one will vary depending on the individual provider. The sections below detail the most important features of paying international contractors, as well as how business owners can evaluate prospective providers when making their decision.

1. Multi-Currency Support 

A robust multi-currency account allows business owners to pay international contractors quickly and easily across different currencies without having to manage multiple bank accounts. In addition, they can avoid expensive exchange fees because they can pay contractors in the desired currency from their account (assuming they have available funds). 

The more currencies a platform offers, the greater its global reach. The table below describes the qualities at different levels of multi-currency support in greater detail.

PoorFairGoodBetterBest
No multi-currency supportLimited (1-3) currencies supported5-10 common currencies, but no regional options30+ common currencies50+ currencies

Payoneer WFM, for instance, supports payments in 70 currencies.

2. International Invoicing Options

International contractors often prefer to use invoicing due to the compliance and tax measures it provides. In addition, it can often help streamline the payment process. For business owners, itโ€™s a great way to pay international contractors quickly & easily while also giving them the peace of mind that comes with a written agreement for their labor. 

The exact solutions that are available to business owners vary depending on what kind of platform they work with. When evaluating the invoicing options available to you, consider the following scale:

PoorFairGoodBetterBest
No invoicing availableProvides templates for invoicing, but no automationBasic invoicing with limited customization and trackingWorks in tandem with multi-currency support and tax calculationsFully automated invoicing for recurring payments with full customization

Similar to multi-currency options, invoicing is a valuable enough service that providers typically have a page dedicated to its description

3. Global Reach

Business owners who want to source the best talent require a solution that can manage global transactions and has a customer support team that works directly with contractors in the appropriate language. Access to this level of support allows business owners to truly collaborate with international contractors while also ensuring a positive working relationship.

PoorFairGoodBetterBest
Limited (USD and EUR) to no support for global contractorsAvailable in 5-50 countries with limited currency/language support50+ countries
10+ languages
100+ countries
15+ languages
150+ countries
20+ languages

4. Faster Payment Times

Paying international contractors effectively requires paying them promptly. This not only ensures a regular payment cadence but also enables businesses to handle adjustments quickly in the event of overlooked or non-recurring payments. On average, the experience of paying international contractors typically falls somewhere on the scale below.

PoorFairGoodBetterBest
5+ business days3-5 business days2-3 business daysSame-day paymentsInstant or near-instant payments 

Payment speed is often buried in the FAQs of many international payment providers due to the difficulty in providing an answer to the question. The reality of international payments is that unless you have a direct payment portal, the actual speed will vary depending on the international clearinghouse as well as the international and local banks. 

Unless they provide this portal themselves, providers can typically only provide you with an average based on how long their existing payments take. For the best results, seek out options that provide this portal.

5. Low Fees

Paying international contractors typically incurs a great number of fees: 

  • Payment Processing
  • Currency Conversionย 
  • Bank Transfer
  • Withdrawal
  • Cross-Border/International
  • Complianceย 
  • Intermediary Banks

In addition to all of those above, many services now employ a subscription model to generate revenue. Thatโ€™s why finding an international payment provider that provides transparency into their fee structure is critical. The details will vary by individual provider, but the scale below breaks down some of the most common fees.

PoorFairGoodBetterBest
High rates
Hidden charges
Multiple fees per payment
Moderate rates
Limited transparency
Additional multi-currency or international fees
Moderate rates
Provides fee information, but materials do not target average readers
Competitive multi-currency rates
Minimal rates
Transparent pricing information is provided
Low currency conversion
Zero or negligible fees, including invoice payments
Real-time currency conversions at mid-market rates
No hidden charges

Because the question of fees is so common, we highly recommend avoiding payment solutions that do not have a dedicated page explaining their fees. Furthermore, the page should clearly explain where these fees apply in the transaction process, as some platforms include fees at multiple stages of the transaction, adding up to more than is initially advertised.

The best solution to pay international contractors easily and quickly? 

Finding an all-in-one solution for international payments allows you to customize your service to your needs and grow your business as needed. Most often, this means working with a global contractor management platform like Payoneer Workforce Management.

Our solutions are fully customizable and provide users with a high degree of integration options for business owners and freelancers who want a platform that offers payments as a comprehensive solution. Contact us for more information.

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FAQs

1. How do I pay an international contractor?

You can pay an international contractor using methods like wire transfers, payments platforms, or global payroll platforms such as Payoneer WFM. It’s important to choose a secure, cost-effective option that also supports compliance with local laws.

2. Do I need to issue a 1099 to a foreign contractor?

No, you usually do not need to issue a 1099 to a foreign contractor. However, you should collect a completed Form W-8BEN from the contractor to document their foreign status for IRS records.

3. Can a US company hire an international contractor?

Yes, a US company can hire international contractors. You donโ€™t need to set up a local entity, but you must follow local labor laws, manage taxes correctly, and use proper contracts to avoid misclassification.

Disclaimer 

Nothing herein should be construed as if Payoneer Inc. or its affiliates are soliciting or inviting any person outside the jurisdiction where it operates/is licensed to engage in payment services provided by Payoneer Inc. or its affiliates, unless permitted by applicable laws. Any products/services availability are subject to customerโ€™s eligibility. The availability of this product is not guaranteed and may vary. Not all products/services are available in all jurisdictions in the same manner.

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