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How to pay & onboard contractors internationally

byEditorial Team
December 14, 2023
in Tech

Working with contractors has numerous benefits. It allows your company to target and attract talent with specialized skills, delegate projects efficiently without training or hiring additional workers, and expanding into new markets globally.

Top talent can be located anywhere in the world. And the contractor who perfectly fits your business’s needs might be in a different state or continent. That is where onboarding and paying contractors internationally comes in.

Understanding how to pay & onboard contractors internationally is an important piece to establishing and maintaining your business’s global workforce. Let’s discover more about onboarding and paying contractors internationally.

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How to pay & onboard contractors internationally
(Image credit)

Important things to do before onboarding and paying contractors

Before hiring and paying your international contractor, you need to complete a few important tasks, which include the following:

  • Establish an independent contractor agreement: A contractor agreement includes a comprehensive description of all the services offered. It also includes the length and terms of the project, payment details, as well as confidentiality, dispute resolution, and non-solicitation clauses.
  • Define contractor payment terms: Numerous payment options are available to enable you to pay your international contractor. You can either pay your contractor upfront an hour after the task is completed or begin with a downpayment and complete the remaining amount when the project is complete. Settle on an option that perfectly fits your budget and define your payment terms in the agreement.
  • Establish contractor payment schedule: You need to determine whether you want to hire a contractor for a single project or several of them. Several options are available to pick from, including per project, weekly, or monthly. This ensures timely and consistent contractor payments.
  • Gather relevant tax forms: When engaging international contractors, gathering relevant and correct paperwork is a vital step. For example, if the business is located in the USA, you’ll need to issue a Form W-8BEN for your contractor to complete. Such a form classifies a contractor’s status as a non-US citizen, a foreign worker and confirms that the entire project will be completed in the foreign country.
  • Classify the contractor correctly: Contractor classification includes a set of rules and regulations designed to safeguard the outworker’s interests. Remember that each state and country operates differently when it comes to contractor classification.

International contractor payment solutions

International contractor payment methods are automated platforms that enable business owners to pay their outworkers across the globe. Standard outworker payment solutions integrate all international exchange fees into your company’s payment and seamlessly transfer money to your contractors. Also, some contractor payment services offer extra features to allow your company to stay compliant.

Do you want to pay and onboard contractors internationally without breaking the labor and employment law? Be sure to partner with a top-rated service provider in the industry.

Featured image credit: Luis Villasmil/Unsplash

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