How to Pay International Contractors

July 27, 2022

In the digital age, it’s not uncommon for companies to expand their talent search and hire international contractors. Whether you need a new copywriter for your content team or an experienced website designer for your marketing department, you can often find top-notch hires overseas for less than you’d pay domestically.

But what are the nuances of hiring and paying workers from other countries? Read on for everything you need to know.

Why Hire International Contractors?

Hiring international contractors is a great way to access highly skilled workers and top-notch talent in other countries. If you are scaling your business or want to improve the quality of your services, hiring foreign contractors can help you do that.

Why should you consider international contractors?

  1. They have unique skill sets: What if you need someone with experience in web design? Maybe you’re looking for a product designer specializing in product labels. If so, many great candidates outside of the U.S. can deliver what you need.
  2. They have different perspectives: Teams perform better when each member has their unique point of view and perspective on design, technology, etc. By hiring more diverse talent, your capabilities expand significantly.

Who Counts as an International Contractor?

International contractors provide services to companies in other countries. They are not considered permanent employees as no entity exists in their home country. 

These independent contractors are hired when their specialized skills are needed for specific projects for a set duration of time. They often juggle multiple clients and develop expansive portfolios due to their experience.

How Do I Pay International Contractors?

Here’s everything you need to know about how to pay international contractors:

1. Do Your Research

Paying foreign employees can be a complicated process, so it’s important to know what you’re getting into. To ensure you’re setting reasonable rates for your contractors, research local salaries before making an offer. 

You can also use websites like Payrate and MyPayRate, which estimate local rates for specific tasks based on the worker’s location and occupation.

2. Choose the Best International Payment Platform

In an increasingly global economy, it is easier than ever to send money all over the world for various purposes. PayPal, Payoneer, Wise, Xoom, and some remote work platforms make it easy for contractors to access their funds, regardless of location.

3. Set Concrete Parameters for Payment

When hiring and paying international contractors, set concrete agreements about their deliverables and your payment schedule. A typical and equitable arrangement would be to send complete payment once the final product is submitted or your contractor reaches a certain metric. 

Regardless of your specific terms, make sure both parties are clear about their obligations every step of the way. This will help prevent future conflict between client and contractor. 

How to Price an International Contractor’s Fees

A crucial aspect of hiring an international contractor is deciding how much to pay them. There is no perfect, foolproof way to set a budget for your next hire—your specific requirements are unique to your enterprise, and you must consider many elements before nailing down a certain rate.

Think about the level of specialization, training, experience, and education needed for the job you’re hiring them for. If you want to hire a UI/UX expert to tackle prototyping, user flows, design, usability testing, and information architecture, your budget will likely be significantly higher than if you just need someone who can navigate basic WordPress functions.

It’s also important to consider how much time is required for the job in question. The longer it takes to complete a task, the more you will have to pay. A reasonable timeline for project completion and a reasonable contractor rate will help you set your budget. 

What Other Things Should One Consider Before Hiring an International Contractor?

When looking for an international contractor, you should make sure that your company’s needs will be met. 

Here are some things to consider:

  • How long have they been working in this industry? How much work do they have currently on their plate?
  • How did their previous projects turn out? Have they worked with companies like yours before?
  • Do they have a strong portfolio of past work? If so, what kind of feedback did they get from clients?
  • What is their communication process like? Do they respond in a timely manner?
  • Do they have processes in place to take care of issues (such as revisions, corrections, connectivity issues, or delays) that may arise along the way?
  • Are they amenable to the method of payment you offer?

Once you have all this information about your contractor and you’ve set a concrete agreement about your expectations and obligations, you’re ready to hire an international contractor.

What Are Some of the Challenges Involved in the Payment Process? How Can I Avoid Them?

You will face certain challenges when hiring and paying international contractors. Fortunately, there are ways to mitigate them.

First, choose a payment method with the lowest fees for international transfers. Do your due diligence on the many payment platforms available and choose one that will work best for you. 

Next, draft clear contracts that define a contractor relationship instead of an employee one. This will help prevent any legal and tax issues down the road.

Choose the best currency to use for your workers’ payments. Be sure to comply with local tax laws each step of the way.

Finally, create a streamlined payment process. This will involve deciding whether or not you should:

  • Ask for an invoice
  • Pay your contractor on a weekly, bi-monthly, monthly, or by project basis

Choose a process that will be as smooth as possible to maintain a good relationship with your contractors.

Paying International Contractors is Easier Than You Think

Hiring and Paying international international contractors does not have to be difficult. The first step is choosing a payment method appropriate for your business. You’ll need to ask some questions about what you’re looking for and what your budget looks like—the answers will help you decide which of the many options available is right for you.

Once you’ve signed an agreement with your contractor and selected the best payment method, you must create a workflow when dispensing payments. Here are some tips:

  • Make sure all information is accurate before submitting your payment request
  • Be mindful of deadlines and communicate with your contractors about any changes or delays in payment timing
  • Use good communication practices with your contractors to keep track of their progress and make sure your project goes smoothly from start to finish

Ready to take your business to the next level? At Kala, we make your business our priority. Our work has taken us around the world, but our focus remains on one thing: helping businesses grow their revenue and reach their goals. 

We’ve helped companies do this with high-level social media campaigns, email marketing, and robust digital advertising strategies. No matter how you want to get your message out there, we can help make it happen. Visit our website to learn more.

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