Pay Freelancers Overseas: An How-To Guide on Best Tools & Apps
Many businesses rely on international freelancers and vendors. Whether you’re hiring a freelancer overseas for a special project, or commissioning a report from a journalist stationed in another country, it’s important to have a guideline of best practices to pay them. While it may seem daunting to pay freelancers overseas, the process is quite simple with the right tools.
After you’ve collected a signed contractual agreement and any relevant tax documents from the freelancer, agree on payment terms and currency. Initiating international payments can be time-consuming for those unfamiliar with the process. In addition, freelancers may want to be paid in their local currency, not the currency of wherever your business is headquartered.
Employing freelancers abroad
Freelance talent is everywhere, thanks to technology and our ever-increasing remote world. As a result, businesses can easily utilize freelancers from around the globe that have unique specialities and skill sets. Nevertheless, employing freelancers abroad may also present some legal challenges and risks.
Here are some things to know before employing freelancer abroad:
- Before you pay freelancers overseas, consider using an entity or setting up a subsidiary.
- Ensure your business correctly classifies freelancers as independent contractors, not employees.
- Create a well-rounded independent contractual agreement that includes scope of work, employment classification, and payment terms.
- File relevant tax documents and information with your business’s governing revenue or auditing service, like the IRS for US-based companies.
Pay international vendors
There are several options when it comes to paying freelancers overseas. Businesses and freelancers alike appreciate fast, simple, and cost-effective means of payment. A delayed payment could not only sour a business relationship, but rack up fees as well.
Pay freelancers via wire transfer
The most common way to pay international vendors is through direct deposit or wire transfer. This method is largely regarded as safe and secure. If the freelancer is overseas, you’ll need:
- The name of the bank the payment will be wired to
- The account number
- The routing number
- The name of the freelancer who owns the bank account
- The IBAN and BIC/Swift code for European freelancers
- The BIC/Swift code, BSB, and account number for Australian freelancers
- In some cases, a home address
Using PayPal to pay freelancers overseas
On the other hand, PayPal is a popular international money transfer service and platform that also offers business services. Paying freelancers overseas is simple with PayPal, but it’s a good idea to keep track of exchange rates and percentage fees.
The best way to pay overseas suppliers
The best way to pay overseas suppliers is with OutVoice, the freelancer management and payments solution. OutVoice automates payments to overseas freelancers, vendors, suppliers, and contractors. One click allows your business to onboard, manage, and pay freelancers anywhere in the world. Once you click pay we take care of the rest. Freelancers can select their desired currency, sign your company’s contract agreements, enter bank and tax information during the onboarding process — storing everything in one place for easy access among your team.
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