How to Pay Contractors in Ukraine
June 10, 2021
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It’s never been easier for small businesses to harness the knowledge and skills of a global workforce, including from growing talent pools like Ukraine. But there’s more to it than finding the right worker to fill a role or complete a project—you need to be able to pay them for their work. Wondering how to pay contractors in Ukraine?
While traditional methods of payment for international contractors include wire transfers, money orders or even bank transfers, they’re not always the most cost-effective way to send funds. It’s never the fastest, either. If you’ve found a good contractor in Ukraine, sending payments as quickly and hassle-free as possible keeps them happy. Get to know your options and you’ll not only save time and money, you’ll also foster goodwill with a Ukrainian team that can help your business thrive.
Why hire contractors in Ukraine?
Ukraine is a rapidly developing country with a skilled workforce that’s ready to take on a variety of tasks. There’s a burgeoning talent pool of workers who have professional expertise in programming, web development, IT and more.
One of the most important benefits to hiring Ukrainian contractors is that they’re able to work for very competitive rates thanks to a relatively low cost of living. This makes outsourcing a very appealing option for North American businesses seeking to keep costs low. There’s also a strong English-speaking population of young professionals in the region, which makes onboarding even easier.
One of the hidden benefits to hiring independent contractors in Ukraine is the convenient time zone. The country has a seven- to nine-hour time difference with North America, which makes it a better option in terms of shared working hours when compared to other outsourcing countries like India, Vietnam and Singapore.
Currency and transfer considerations
Many companies quickly realize that there are currency barriers to paying an independent contractor in Ukraine. As of May 2021, one United States dollar (USD) is equivalent to close to 28 Ukrainian hryvnia (UAH). The conversion has to occur either before or after the payment transfer, and there are always some fees involved. Either the sender or the receiver will have to cover the cost.
While bank transfers have traditionally been the most common way to pay independent contractors in Ukraine, this method is quickly declining due to hefty fees. The exchange rate for this currency pair tends to fluctuate more than major currency pairs. The larger the amount sent, the more a business is likely to pay depending on the forex market.
Ways to pay contractors in Ukraine
There are many ways to pay contractors in Ukraine, but they differ widely in terms of speed and cost. What works well for one business owner might be prohibitively expensive for another. It all depends on how much and how often payments are sent, and whether the recipient in Ukraine has easy access to a banking institution.
- Wire transfers. These payments are simple and low risk, which makes them ideal for larger one-time payments. Fees can be high, making them an expensive choice for companies planning to send regular payments to contractors.
- Check or money order. Paper payments including check and money order are inexpensive and contractors have flexible options when it comes to cashing them, but they can take a very long time to reach the recipient—or get lost along the way.
- Bank transfer. While this option is relatively affordable, the recipient needs to have access to a traditional bank. There are also currency exchange markups to take into account, making them unattractive to potential contractors.
- Digital payments. Senders and recipients alike appreciate the ease and speed of digital payments. It only takes a few clicks to send money to overseas contractors, and the recipient can see the transaction immediately and transfer funds however they want to.
While each of the options above have their benefits in terms of security and cost, there’s only one option that provides instantaneous transfer of funds. Not only is it easier on the person sending the funds, but also for the person receiving them.
The best way to pay independent contractors in Ukraine
While Ukraine is a rapidly developing country with a stable bank infrastructure, sending a bank transfer or money order isn’t the quickest way to get contractors the money they deserve for their work. Digital payment platforms like Veem provide businesses with a hassle-free, low-cost way to pay independent contractors in the Ukraine.
The reason many small businesses hire global contractors in the first place is to save time, money and hassle—but getting them paid the funds they deserve can be a major hassle in itself. While there are many ways to get payments into the hands of independent contractors in Ukraine, not all of them are as affordable, fast or efficient as Veem. It’s a service that your contractors will appreciate.