Pay international contractors

Advertised prices, verified

The payment run, step by step

1. Invoice and approval. The contractor invoices against the contract; someone who is not the requester approves it. This sounds bureaucratic at two contractors and becomes the control that catches duplicate and fraudulent invoices at twenty. Keep the invoice with the payment record, not in an inbox.
2. Confirm status documentation is current. Before money moves, the file should hold a current W-9 for US persons or W-8BEN for foreign individuals, plus the signed contract. Forms collected once and never refreshed go stale as circumstances change; platforms handle renewal automatically, spreadsheets do not.
3. Choose currency and execute on the agreed rail. Pay in the contract's currency over the rail you priced end to end, and on the first payment to any new contractor, confirm the amount actually received. Intermediary deductions and FX margins reveal themselves on arrival, not on the sending screen.
4. Record everything for tax time. Store invoice, payment confirmation, amount, date and currency per contractor. Year-end reporting for US-person contractors runs on Form 1099-NEC where required, and documented foreign persons working abroad sit outside it; either way, the position you take is only as strong as the file behind it.

What each rail actually costs

A SWIFT wire carries a sending fee, possible deductions by intermediary banks along the route, and an FX margin baked into the rate; the contractor can receive noticeably less than you sent, and the contract should say who absorbs that. Money-transfer platforms compress the FX margin and show clearer pricing, which makes them the default rail for most corridors, but they remain payment tools only.

Contractor-management platforms charge a flat monthly fee per active contractor and bundle payouts with the workflow: form collection, contracts, invoicing and records. Whether the bundle is worth it is pure arithmetic on your volume: the fee against the administrative hours and error risk it removes. The vendors in our index publish these fees on their own pricing pages and the table on this page quotes them verbatim, with the date each was verified, so the comparison starts from evidence rather than a sales call.

The compliance that rides along

Every payment silently asserts a classification position: that this person is genuinely a contractor. The IRS tests that on behavioural control, financial control and the relationship's character, the contractor's own country applies its own test, and misclassification lands as back employment taxes plus penalties. The paperwork you keep, contracts, forms and invoices, is what supports the position when it is examined; a payment history with no file behind it is an assertion with no evidence.

Two quieter obligations also travel with cross-border payments: sanctions screening, which banks and platforms run on every transfer and which can freeze payments to certain destinations, and the contractor's local rules, since some countries expect specific invoice content or currency handling from their residents. None of this page is legal or tax advice; contracts and statutes control, and edge cases deserve a professional's reading.

Common questions

What paperwork do I need before paying a foreign contractor?

A signed contract and a current W-8BEN documenting foreign status for individuals, or a W-9 if the contractor is a US person. Collect before the first payment and keep them with the payment records, refreshed when circumstances change.

Why did my contractor receive less than I sent?

Usually intermediary bank deductions on a SWIFT route or an FX margin between the applied rate and the mid-market rate. Price rails by what arrives, not what the sending screen shows, and agree in the contract who absorbs transfer costs.

Do I report payments to foreign contractors to the IRS?

Payments to documented foreign persons for work performed entirely outside the United States generally fall outside Form 1099-NEC reporting, which is what the W-8BEN on file supports. US-person contractors are reported where required. Confirm specifics with a tax professional.

Coverage by country

• Employer of record vendors covering Singapore
• Employer of record vendors covering Mexico
• Employer of record vendors covering Spain
• Employer of record vendors covering Colombia
• Employer of record vendors covering United Kingdom
• Employer of record vendors covering France
• Employer of record vendors covering Hungary
• Employer of record vendors covering New Zealand