How to Pay Contractors in Germany

4 min read

When prospecting contractors from the developed world, Germany quickly climbs its way to the top of the list. Aside from the country’s industrious reputation and diligent worker population, German contractors are well-known for being highly educated and skilled across a broad range of disciplines. Whether you’re looking for a freelance engineer or an architect with global design experience, chances are, you’ll find them in Germany.

Hiring German contractors is a great way to raise the bar for talent in your organization or staff specialized talent for timely projects. The question then becomes one of how to pay contractors in Germany. Thankfully, it’s simpler than most companies realized to transfer funds from one developed country to another.

If Germany is home to the specialized contractors your company needs to achieve success, make sure you know how to get them paid on-time and in-full, without jumping through unnecessary hoops. Here’s what you need to know.

Why hire contractors in Germany?

Of the countries and the economies in the world to rival the sophistication and breadth of the United States, Germany is a close second. Germany is home to one of the most well-educated talent pools in the developed world, with contractors from all walks of life ready to lend their expertise to a global marketplace.

One of the biggest benefits to working with contractors in Germany is the superior standard of work you’re likely to receive from German contractors. True to the country’s industrious nature, German contractors have a reputation for their timeliness, attention to detail and tremendous work ethic. While you’re likely to pay a premium when hiring contractors in Germany, it’s sure to be offset by the value you get in return.

Experience is another asset companies benefit when working with German contractors. Some of the largest countries in the world are either headquartered or have a heavy presence in Germany—from automakers to enterprise software companies. As a result, many freelancers and contractors in Germany have had some level of experience working with established companies, and are thus familiar with due process.

Currency and transfer considerations

As most people know, Germany is part of the European Union, which means most German contractors will advertise their rates in Euros (EUR). Many companies advertise their rates in United States Dollars (USD), which means there needs to be a conversation before any hiring or payment takes place.

If your contractor prefers landed funds in Euros, prepare for currency exchange. The good news is that the Euro-Dollar pair is the most-traded currency pair in the world, which means exchange rates will usually be timely and competitive. USD has about 20% less buying power than EUR, which is important to factor in when prorating German contractors.

Ways to pay contractors in Germany

If you’ve found the talent you need in Germany, you’ll need to find a way to make sure that contractor gets paid for the work they’re doing. Transferring money overseas to a German contractor is easier than you think, and there are a multitude of ways to get them paid. Here’s a look at some of the most common options:

  • Wire transfer. Best-used for large, one-time or infrequent transactions, there’s no beating the expedience and security of a wire transfer. However, there’s a price to pay for these benefits, which makes them cost prohibitive for recurring payments abroad.
  • Check or money order. When dealing with contractors in Germany, there’s little-to-no reason to use checks or money orders. In fact, these payment options might even be suspicious. Stick to digital modes of payment.
  • Bank transfer. Bank transfers are convenient when it comes to working with contractors in developed countries like Germany; however, the exchange rate your bank offers for funds transfer might not be all that great (or transparent).
  • Digital payments. So long as both parties have a digital wallet open, digital payments are a seamless and sophisticated way to get money into the hands of contractors overseas. With transparent conversion rates and the ability to track payments, they’re ideal. 

Because Germany is another developed economy, United States companies have more options when it comes to sending money to talent they’re collaborating with. Nevertheless, it’s important to choose the mode of payment that’s best-aligned with your working relationship.

The best way to pay independent contractors in Germany

When it comes right down to it, the best way to pay contractors in Germany is the one that ensures their funds arrive on-time, in-full and in the currency they prefer. This is why so many businesses have turned to digital payments. There’s simply no beating the flexibility!

Let Veem introduce you to the world of digital payments for international contractors and make it simple to send funds around the globe. It’s never been easier to make your workforce a global one, while keeping everyone paid. Schedule a demo today!



* This blog provides general information and discussion about global business payments and related subjects. The content provided in this blog ("Content”), should not be construed as and is not intended to constitute financial, legal or tax advice. You should seek the advice of professionals prior to acting upon any information contained in the Content. All Content is provided strictly “as is” and we make no warranty or representation of any kind regarding the Content.