Paying Independent Contractors in Other Countries: Factors to Consider

4 min read

You found an independent contractor who’s a perfect fit for your business’ needs. The problem is, they’re located in another country. The first question is always “how are we going to pay this person,” and it’s an even stickier question when it comes to paying independent contractors in other countries. Paying foreign contractors can seem like a huge hurdle to cross. Thankfully, options for payment are increasing. It’s getting easier every year to pay contractors, no matter where in the world they are.

To pay foreign contractors appropriately, you’ll need to consider many more factors than you would a domestic contractor. Where are they located? What currency will you pay them in? How often will you pay them? Do they have access to a traditional bank account? The answers to these questions will influence the method of international payment that works best for your business—and your contractors.


Where are they located?

Businesses big and small have more choices than ever when it comes to recruiting talent. The whole world is open to you as a global marketplace. It’s easier than ever to find highly specialized contractors that fit your business’ needs. Sometimes, the perfect fit for you is someone located internationally.

Countries like India, Pakistan and Vietnam have huge pools of skilled contractors for lower costs than similarly skilled workers elsewhere. Europe offers other attractive countries for contracting out work, including Germany and Sweden, which offers highly educated experts.

Where they’re located has a significant impact on paying international contractors: how much, how often, the currency, and even the level of communication you might expect from them.


What currency will you pay them in?

The currency you use to pay contractors in other countries is another determining factor. Each country, or economic zone, has its own national currency, or even a regional currency such as the Euro. Your contractor may prefer payment in their own currency. If they do, you’ll need to factor in exchange rates and fees.

Alternatively, your contractor might prefer payment in USD, perhaps because it’s stronger than their own currency. If this is the case, it should ease the payment process a bit, since there’s no need for currency exchange. In either case, it’s an important first hurdle to establish.


How frequently will you pay them?

How often you need to pay contractors will also influence the payment process. Depending on the type of work they’re doing, the individual contractor and your business model, payment frequency may be as frequent as every week or as infrequent as projects wrap up.

The frequency of payment—whether paying weekly, biweekly, monthly or quarterly—is an important consideration in deciding how to pay your contractors. Frequent wire transfers, for example, will incur huge costs to the business. Meanwhile, large funds transfers every so often may need tracking to ensure they’re delivered safely. When and how much you’re paying matter significantly when it’s a question of international transfers.


Are they banked or unbanked?

Whether your independent contractors are banked or unbanked is maybe the most important element you need to factor in. There are a significant number of people in other countries who are unbanked—usually due to their place in an emerging economy.

If you’re working with someone who’s unbanked, it limits payment options. Unbanked contractors will likely favor digital payments because they can easily open and maintain a digital wallet without the need for a formal banking institution. Businesses need to understand this preference and offer a payment option to accommodate it.


What mode of payment makes the most sense?

Once you know who your independent contractors are, you can weigh your different options when it comes to method of payment. The options boil down to international bank transfers, wire transfers, international money orders and digital payments.

  • International bank transfers are the traditional way to pay contractors in other countries, and still the most common means. Their use, however, is declining due to how expensive it is to wire money internationally.
  • Issuing an international money order is an antiquated way to make payments that just plain takes too long. Plus, there are numerous obstacles in cashing foreign money orders, even if they’re a legitimate form of payment in that country.
  • Wire transfers tip the scales in terms of expense. While they’re instant, they carry huge fees and are really only applicable for large one-time payments, such as at the culmination of a significant project, totaling thousands of dollars.
  • Digital payments are a growing industry, and both the fastest and most affordable way to pay someone internationally. It takes just a few clicks to send a payment, and a platform like Veem even lets you track and trace that payment.


Keep contractors paid, no matter where they work

Paying independent contractors in other countries is easier than ever before. You can pay your workers no matter where they are, what currency you pay them, the frequency of payment or even their banking status. Long gone is waiting weeks for a money order to reach them or having to pay exorbitant fees for a wire transfer.

Sign up for a free account with Veem today, and you can send a payment out with just an email.



* 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.