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How to Pay International Employees

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The beauty of remote work is that you can collaborate with professionals from around the world! However, with that comes the issue of international payments – which can be fiddly and expensive.

Let’s discuss tips on paying international employees without forking out expensive transfer charges or creating additional work for your payroll team.

Working Out the Best Way to Pay Overseas Staff

When creating payment plans, the first step is to ask yourself:

  • Are they a remote employee or freelance contractor?
  • Do you want to pay them in USD or another currency?
  • What are the tax and social security implications?

If you’ve hired a freelancer, it’s pretty much the same as a B2B supplier/customer arrangement. You have the freedom to choose between a few alternative payment systems (more on that shortly).

Paying an International Payroll Employee

The scenario is a little different if you have a formal international employee. They’re entitled to rights and protections, and you’ll need to process their wages through payroll.

Currency fluctuations are also an essential factor to consider – so be clear about how they’ll be paid right from day one.

You can look at smart strategies like a currency exchange agreement or a forward contract if they’re reimbursing expenses in another currency and getting their salary in dollars.

International Employee Payment Options

One of the most straightforward ways to pay overseas staff is by hiring a contractor through a freelance platform and processing payments through the portal. 

Here’s why:

  • Your costs don’t change. It doesn’t matter if the currency fluctuates; you have an agreed price or rate per hour, and that’s that.
  • There aren’t any processing fees – you pay when the work is finished or at agreed intervals and won’t need to factor in bank charges or admin fees.
  • Freelancer taxes aren’t your problem. A self-employed contractor will sort out their returns, and unless you’re hiring them full-time and need to think about off-payroll employees, the only bookkeeping for you is to record the expense.

Cross Border Payroll Alternatives

Say you’ve hired someone as a staff member; you’ve got a bit more work to do. You might be able to keep the employee on your regular payroll if they’re on a short-term overseas assignment or managing an international project. However, it’s wise to get advice from your accountant. Some countries have rules about remote payments, tax residency, and employees representing an overseas business.  Read about how to send money to India from the US

We’ll assume that isn’t an option, so the alternatives are to outsource, pay the individual as an independent contractor, or commission a local payroll provider.

Appointing a Local Payroll Provider

Businesses with overseas staff can commission a third-party company to put the employee on their payroll.

You will be charged fees for payroll admin and pay the salary in advance to the payroll provider.

They’ll keep the cash in a withholding account to pay the individual and any tax or social security contributions.

Outsourcing International Payroll

If you’re a small business, it isn’t always cost-effective to appoint a payroll provider.  They’re really just an admin service and not a legal employer, so there are some limitations.

Another outsourcing solution is to look for a global service. The payroll company will act as the local employer of record and then deal with the wages directly – accompanied by a fee, of course!

Paying an Employee as an Independent Contractor

The final option is to revert to the solution we mentioned earlier.  If an employee is a self-starter, and you don’t need to control their working hours, it might be best to hire them as a freelancer. That set-up works well for positions such as salespeople, so they can work as and when they like and then claim reimbursements and commissions.

Specialists with an hourly rate, such as a designer, accountant, or web developer, are usually well versed in contractor agreements, which can help take the pressure off when you are creating your contract. 


In the end, the right solution for your business depends on the contract between you and your employee. With several different options available for paying international employees, you can fit the best fit for your company!

Guru makes it easy for employers to pay international freelancers via many different payment methods. Additionally, Guru offers a SafePay service to protect both employers and freelancers during the payment process.

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