How to Pay Contractors in the United States

4 min read

Hiring and staffing can be one of the most difficult parts of running a business. There’s a lot of risk bringing on a new staff member. What if they don’t pan out? Or worse, what if they bring a toxic presence into your company culture? Other times, it’s simply not worth it to hire for a project or position that’s only temporary. For many businesses, hiring a contractor is a safe option.

Hiring contractors mitigates a lot of risk for a business, but it also presents new challenges. The biggest is often how to pay that person. They’re not on your payroll in a traditional sense, which means paying on a 1099 basis. And while most modern bookkeeping software makes this simple, the actual transfer of funds is where many businesses struggle to find the best option. ACH transfer every two weeks? One big wire transfer at the end of the project? There are options, and understanding them is important.

Why hire contractors in the United States?

As mentioned, there are a number of great reasons to hire a contractor. When it comes to hiring contractors in the United States specifically, that list of reasons grows.

The biggest benefit of hiring a United States contractor is, of course, familiarity. If you’re a North American company, a U.S. contractor is going to speak the same language, work the same hours and have the same expectations about the nature of work. There are few (if any) cultural barriers to bridge.

The United States is also home to the most skilled contractor pool in the world. Whether you need a digital marketing expert, mechanical engineer, procurement specialist or a microbiologist consultant, you’ll find them in the U.S. Moreover, you’ll find a full gamut of experience, from eager students fresh out of college to tenured experts with decades of experience.

Finally, there’s a certain peace of mind in working with a U.S. contractor. You can run a background check if needed, or call up references if you want to learn more about them. If they’re local, you can even bring them in for a visit—or, of course, hop on a Zoom call. At the end of the day, working within borders eliminates a lot of headaches.

Currency and transfer considerations

The beauty of paying a U.S. contractor is that any and all questions of currency are immediately dissolved. The United States Dollar (USD) is the only currency accepted in the U.S., and it’s the only thing domestic contractors will want to be paid in—other than maybe Bitcoin. There are no conversions to worry about or exchange rates to consider. All you need to focus on is paying your contractor in-full and on-time.

Ways to pay contractors in the United States

There’s no shortage of ways to pay domestic contractors. The question you need to ask is what works best for you—and them. Here are some of the most common payment options to consider:

  • Wire transfer. Wire transfer is extremely fast and highly secure, but comes at a high cost. It’s a great mode of payment for one-time, high-dollar transactions, such as paying at the end of a project or retaining a contractor quarterly. The cost per transaction makes it prohibitive for weekly or even monthly payments.
  • Check or money order. While it’s nearly impossible to pay contractors in other countries reliably with check or money order, this is still a common mode of payment for domestic workers. That said, it’s fast-becoming antiquated. Many contractors want instant payment via ACH transfer or wire.
  • Bank transfer. Bank transfers are one of the most convenient ways to get contractors paid—especially domestic contractors. All it takes is routing and account numbers to send a payment straight to the waiting account of a contractor. The downside is that there’s often little visibility after the transfer request is sent. Moreover, some banks take longer than others to process the transfer.
  • Digital payments. Digital payments combine the convenience of bank transfers with the security of wires, while adding visibility. Companies and contractors alike can see exactly where the money is at any given time. Moreover, contractors can manage their digital wallet however they want, whether it’s transfer to a bank account or to some other type of account.

Most, if not all, of these modes of payment are acceptable when paying contractors in the United States. It’s up to companies and their contractors to decide on the best option for each situation.

The best way to pay independent contractors in the United States

For many companies hiring domestic contractors, the best way to get their people paid is the one that’s quickest, easiest and most efficient. For a growing number of North American companies, that means turning to digital payments, even over traditionally reliable bank transfers. With better transparency, superior reliability and virtually no cost, it’s the future of business payments.



* 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.