How to Pay Contractors in Brazil
June 8, 2021
Ready to harness the power of an international talent pool to help grow your business? Working with Brazilian contractors can be mutually beneficial for both parties, but sending payments can be a bit tricky. At the end of the month when the invoice comes due, it can be a challenge to pay contractors in Brazil, especially if they don’t have access to traditional banking institutions.
While security should always be the top priority when sending international payments, relying on traditional methods of payment like wire transfers can end up costing businesses money they just don’t need to spend. It can also jeopardize your relationship with contractors if there are any delays in payment.
Every business has unique needs. Get to know your options for paying independent contractors in Brazil, to benefit your own bottom line and pay your South American workforce in an efficient, fair manner.
Why hire contractors in Brazil?
Small business owners see many benefits when they hire contractors in Brazil. First and foremost, Brazilian contractors offer their services at very competitive rates. Whether you need web developers to build a website, graphic designers to create and edit compelling images or you need a hand with time-consuming administrative tasks, there’s an eager pool of skilled workers who are ready to help. Their rates are often much more affordable compared to North American workers, or even other popular outsourcing countries like India and China.
Ease of onboarding is another advantage to hiring contractors in Brazil. Independent contractors are typically hired based on specific knowledge or skills. There’s not a lot of hand-holding—they can usually hit the ground running on any project related to their skillset.
Currency and transfer considerations
One of the immediate barriers businesses face when paying independent contractors in Brazil is currency exchange. As of May 2021, one United States dollar (USD) is equivalent to 5.29 Brazilian Real (BRL). For contractors in Brazil to receive funds for their work, a currency exchange needs to occur, and either the sender or recipient will eat the cost. It can be a hefty fee depending on both the amount transferred and method of sending money.
While traditional payments provide a secure way to get funds into the hands of Brazilian contractors, they’re seen more and more as an outmoded method of payment. This is due to obfuscated currency exchange rates and the fact that the recipient needs access to a traditional bank. It’s inconvenient for independent contractors, and can often be a barrier in finding the right talent.
Ways to pay contractors in Brazil
There are a variety of secure ways to pay contractors in Brazil, and they vary widely not just in terms of fees, but also in speed and convenience. Depending on the circumstances of your business, each option can have benefits.
- Wire transfers. There’s no doubt that wire transfers are fast. They get funds into the hands of international contractors almost instantly, but you pay a hefty fee for the service. Due to their cost, these payments are best for one-time transfers instead of regular, continued payments.
- Check or money order. Sending money the old fashioned way can be inconvenient for both sender and recipient. Contractors in Brazil may have a hard time cashing foreign checks or money orders, and mailing a physical check just isn’t practical in a digital world.
- Bank transfer. While bank transfers are relatively affordable, they only work if the recipient has a relationship with a banking institution in their country. There are also currency exchange markups to deal with, making them a less than desirable option for both parties.
- Digital payments. Businesses can send money to contractors with just a few simple clicks using digital payments. It’s convenient for the recipient, too, since they can see the transaction and transfer funds to their desired app or bank almost instantly.
Paying contractors in Brazil can be challenging for a variety of reasons, especially if the receiver is unbanked. While each of the options above have their benefits, there’s one payment method that’s reliable, secure, fast and affordable: digital payments.
The best way to pay independent contractors in Brazil
Digital payment platforms like Veem are the best way to pay independent contractors in Brazil. They’re instantaneous and don’t require the recipient to have a relationship with a traditional bank. There’s no quicker or more affordable way to get funds into the hands of workers.
Running a small business in any industry is a challenge, but in today’s modern world you can have a highly skilled international workforce on your side. Paying independent contractors quickly, and in the correct amount, fosters goodwill and strengthens your relationship with your team. Take advantage of digital payment systems to get funds into the hands of contractors in the most convenient way possible.