International contractors aren’t just a luxury for large enterprises anymore. They’ve become a vital part of many small and medium sized businesses as well. So, finding an efficient way to pay overseas contractors (on time) is critical to maintaining these strategic partnerships. Here are a few things to keep in mind and watch out for.
People usually default to their bank for international payments – mainly due to habit. However, they often find themselves subjected to poor exchange rates and exorbitant fees. Your contractors aren’t safe either as they often lose out to reduced exchange rates when converting to their local currency. A good way to determine your best option is to compare exchange rates and check how much money your beneficiary will end up receiving.
Another drawback is high fees. Making consistent payments via wire transfer adds up fast, so be sure to take a close look at the type of fee you’re being charged. Are you looking at a flat fee per transfer that doesn’t change, or a fluid percentage dependent on the amount being transferred, or some other variation? Also, pay attention to receiving fees. Each country has very different laws and regulations on receiving money, so the amount you send may not necessarily be the amount your beneficiary ends up receiving.
Tax liabilities are something most people typically don’t think about when hiring an international contractor. Every country abides by different tax laws and regulations so this is a very important aspect to look into thoroughly.
Certain countries expect that you, as an employer, would account for vacation pay, insurance, and tax policies in both the country you are based in and the country you have hired contractors in. It would be in your best interest to talk to a professional in this regard, as many services have no control over what happens once the money reaches the destination country.
Managing payroll can be tricky when trying to develop your small business. Ensuring that your contractors receive their payments on time is even trickier, given the unpredictability of bank wire transfers.
One sure fire way to maintain a positive relationship with your contractors and suppliers is to ensure they get paid, and get paid on time. Unsurprisingly, not nailing this aspect down can have a very tangible impact on the day-to-day of your business. This is why it’s crucial to find a business payments supplier that is both speedy and reliable.
With REMITR, you can put your international money transfers on autopilot. Our platform lets you schedule and tailor your global mass payments specifically to your unique needs. With us, you can send payments effortlessly, wherever you do business.