Looking for best ways to pay international contractors and employees? Read here


Working with international employees and contractors can be the perfect way to find the best people to grow your business. After all, in our networked world, the talents you need may be on the other side of the world, but they’re still only a few clicks away.

If you’re thinking about growing your global team you’ll need a smart and simple way to manage payroll. This guide walks through some popular options, including using TransferWise for business to pay employees overseas using the mid-market exchange rate with no markups or margins.

TransferWise for businesses

TransferWise is a global specialist in international payments, working with personal and business clients to cut the costs of managing money across currencies.

TransferWise for business is designed to help entrepreneurs and business owners hold, send and spend money in multiple currencies for less. You’ll be able to hold 50+ currencies, and make international payments up to 19x cheaper than with competitors like PayPal. You’ll also get business friendly perks like batch payments and a powerful open API. Let’s take a look at some of the pros and cons of TransferWise for business.

Pros of paying contractors abroad with TransferWise

  • All international payments use the mid-market rate with low transparent fees
  • Payments can be made from USD to most countries
  • Transfers are safe and use bank-level security and fraud detection
  • Manage payments and withdrawals online or from your mobile device
  • Payments can arrive faster than international wires
  • Track your money every step of the way, and get notified when a payment is received
  • Get your own local bank details for 6 currencies including USD, GBP, EUR, AUD and NZD
  • Bulk payment options to make payroll faster


  • Payments can be delivered to bank accounts only - no cash collection. If your contractor doesn’t have a bank account in their home country they would need to open one, or get a TransferWise multi-currency account for personal use.

Make foreign payments via international wire transfers

International wire payments are commonly used by banks and traditional providers. If you want a familiar way to send money overseas, this could be an option for you. However, it’s worth noting that you may pay extra for this service compared to some other payment routes - especially if you arrange payments in person via your bank.

Here are a few of the advantages and disadvantages you’ll want to think about.

The pros of paying via an international wire transfer

  • Using your regular bank is familiar and you’ll usually be able to get face to face, in branch service
  • May be possible to arrange your transfer via a phone call or online banking
  • Higher transfer amounts are often possible
  • High standards of security and fraud detection in place when using your bank

The cons 

  • Overall costs can be high - up to USD50 per payment
  • You may pay intermediary and recipient bank fees which means your contractor could get less than you expect
  • Some banks use an unfavorable exchange rate for international transactions
  • If your payment is routed using the SWIFT network it’ll take up to 5 working days to arrive
  • Not all countries and currencies are available for international wires through traditional banks - and some banks don’t allow international payments at all

International money order for foreign contractors

International money orders are still an option for payments to some countries. However, there are some limitations. For example, USPS postal orders can only be used in around 26 countries, and have a maximum value of USD500-USD700.

You’ll need to buy a money order from your provider of choice. At this stage you’ll pay the money order amount, plus a fee. You’ll then be asked to complete the order to show who the payment is to be made to, and mail it to the recipient. The recipient can then take the order to a location near to them which will cash it - this may be a post office or grocery store for example.

The pros of paying via an international money order

  • No need for the recipient to have a bank account
  • Recipient can get cash locally to them
  • International money orders are a common and familiar payment method in some countries


  • Not a common method of payment in many countries
  • The exchange rates used may not be favorable
  • There may be fees to pay for both the sender and the recipient
  • Speed is an issue as you’re relying on local mail to get the money order to your contractor
  • Limits are typically low
  • There are a number of money order scams and fakes out there

PayPal for international contractors

PayPal is a convenient way to make payments for both personal and business use. However, there are fees to pay, with international transfers attracting several different potential costs

You can set up a PayPal payment online and also access mass payments to manage payroll for your entire team all at once. If you’re weighing up PayPal as a way to pay your international contractors and employees, here are a few pros and cons to factor in.

The pros of paying via PayPal

  • Set up payments online for convenience
  • Make mass payouts to minimize administration time
  • No need for the recipient to have a bank account
  • The speed of PayPal transfers can be competitive with other services

The cons of paying via PayPal

  • PayPal fees can be high - including a 4% currency conversion charge, and extra 2% cost for mass payouts
  • You may find there are fees for both recipient and sender, meaning your contractors get less than you expect
  • Both the recipient and sender need a PayPal account to make use of the service

Xoom for international business payments 

Xoom is a PayPal service which specializes in international payments. Money can be sent for cash pickup or directly to your recipient’s bank account, depending on your preference.
It’s important to note that Xoom is intended for person to person payments and not comercial transfers. This might mean it’s not appropriate for your needs if you’re paying a contractor. Check out the rules before you decide.

The pros of paying via Xoom

  • Xoom allows fast payments - money could be available in just minutes for cash collection and hours for bank deposits
  • Transfers are set up and tracked online for convenience
  • Easy to use system - just follow the onscreen prompts
  • Several delivery options which means you can use Xoom to pay people who do not have a bank account

The cons

  • There are different fees depending on how you pay for your transfer, and how you want the payment to be received - using a credit or debit card can be more expensive than using a bank transfer 
  • Exchange rates may not be favorable - Xoom also makes money on currency exchange which means you’ll pay a markup
  • The amount you can send will depend on a number of factors, but can be as low as USD2,999 in a day, or USD6,000 in a month. This may restrict the number of payments you can make
  • Xoom is not intended for commercial purposes which may mean it’s not the right provider for your needs 

Working with a distributed team has a lot of advantages. Not only can you attract talent from around the world, you can also benefit from having a team in different time zones, making for seamless customer care. However, managing payroll when you have employees and contractors in different countries can be a different matter entirely.

You need to find the best way to pay your employees quickly, with low fees and a fair exchange rate every time. If your payment provider also offers online and mobile services and mass payouts that could even mean you cut down your admin time, and win back precious hours to work on growing your business.

Invest some time in research to find the provider which balances costs and convenience to suit your business. And make sure you look at TransferWise for business for quick, secure, low cost payments around the world. You might find you can save.

Disclaimer: This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

Read more Show less