Paying independent contractors or remote employees can be tricky. In most cases, it’s not the act of sending money that requires significant effort. Rather, it’s the process accounting for all the variables that change depending on the situation.\nBut before worrying about how to pay independent contractors, you have to determine if your team members actually are contractors. Businesses who incorrectly categorize their employees as independent contractors can face expensive consequences.\nThis is a common question for remote teams. Are the people in your team contractors, or are they classified as employees?\nHow to determine if your team members are contractors or employees\nThe IRS has a set of guidelines that differentiate employees from contractors. To make things simpler, answer these three questions about your workers:\n\nWill they be required to undergo a formal onboarding or training program?\nAre there specific tools they need to use or guidelines they need to follow?\nIs there a specific number of hours that they need to meet weekly?\n\nIf the answer to at least two of these is “yes”, then you can safely classify them as employees.\nThe key point to remember is that employees are required to follow pre-established procedures and schedules to do their work. With independent contractors, the results are all that matters. How and when they want to do the job is up to them.\nContractors typically have more freedom in the way they work, but there’s a trade-off. Since they aren’t regular employees, contractors are in charge of paying their own taxes, Social Security, and other fees that are typically withheld by employers. In other words, independent contractors are treated as self-employed professionals.\nWe’ll get into fees and deductions in a bit.\nWhat forms should employers have for independent contractors?\nAccording to the IRS, there are two forms that you’ll need to prepare: Form W-9 and Form 1099-NEC.\nForm W-9 (Request for Taxpayer Identification Number and Certification)\nIndependent contractors are required to fill out this form to confirm their name and Taxpayer Identification Number. Form W-9 doesn’t need to be submitted to the IRS — it’s primarily for verification purposes and future references.\nForm 1099-NEC (Nonemployee Compensation)\nYou are required to submit a Form 1099-NEC if you made a payment of more than $600 for the professional services of an individual or business entity during the year. Make sure that whoever you’re filing a Form 1099-NEC for qualifies as an independent contractor.\nWithholding fees and deductions for independent contractors\nAs previously mentioned, independent contractors are considered to be self-employed. You’re not required to withhold taxes and other fees you would normally pay for regular employees.\nRegardless of the amount that you and the contractor have agreed on, the money that you pay them will be counted as tax-deductible expenses. This amount will be subtracted from your business’s income before it becomes subject to taxation.\nThe amount in question isn’t restricted to the fee that you paid for the contractor’s services. Depending on the agreement between you and them, this could also include additional expenses such as:\n\nSupplies for work like laptops and office chairs\nMonthly allowances for work-essential utilities like their internet bill\nTravel expenses — if you’re having a retreat for your remote team, for example\n\nThere are several other kinds of contractor-related expenses you might incur. You can classify them as tax deductible expenses in most cases — as long as you can prove that they’re necessary for your business to make a profit.\nPayment terms for independent contractors\nDiscussing payment terms with independent contractors extends beyond agreeing about pay rates. Being clear about how they will be paid is every bit as important.\nUpfront payment\nUpfront payment is when you pay the full amount of the contractor fee before they begin working on the project.\nThis payment term presents the highest risk for you, the client. In some instances, the contractor might fail to deliver the expected output or, in the worst case scenario, decide to run away with the money.\nIf that happens, it’s possible to get the money back with legal help, but it will naturally consume additional time and resources.\nUnless the contractor is someone you have successfully worked with before, paying the full amount upfront is not recommended.\nPayment upon project completion\nPaying contractors after the project has been completed is the safest option for employers, but the riskiest for the contractor.\nThis form of payment rarely causes any issues as long as communication between the two parties is clear and the job is done properly.\nHowever, sometimes you’ll work with a contractor who’s had bad clients in the past. They might be reluctant to start work without having at least some cash in hand. That brings us to the next type of contractor payment:\nDown payment\nPaying a percentage of the agreed amount provides a middle ground between an upfront and post-project payment.\nDown payments aren’t as risky as upfront payments, and they can incentivize contractors to produce quality results in a timely manner. If you’re paying on a per-project basis, this option helps build trust between you and your new contractor.\nHourly\nPaying contractors by the hour is an excellent option for both employers and contractors. You only have to pay for the hours that the contractor worked while having the option to increase or decrease your contractor’s workload. It’s fair for the contractor, too, because they know that they’ll be fairly compensated for the time that they put in.\nThe only real downside to hourly payment terms is inaccurate time reporting. This can easily be alleviated by using a time tracking app with pay rates and automated payroll features like Hubstaff.\nTrack time fairly, accurately, and easily with Hubstaff.\nPayroll solutions for contractors and remote employees\nIndependent contractors and international employees can provide you services that are of the same quality — sometimes even higher — as local full-time employees.\nOf course, you need to have a payment method you can safely rely on since all of your employees and contractors will naturally expect compensation. Some of them might have their own preferred payment methods. Others work on a freelancer platform with built-in payment options.\nLet’s take a look at the top contractor payroll solutions.\n1. Automated contractor payroll with Hubstaff\n\nThe best way to pay contractors online is to streamline their work tracking with an automated payroll system.\nHubstaff is a time tracking and payroll software that addresses the main challenge with the methods mentioned above: ensuring that you get value for your money. Hubstaff tracks every hour worked so you know exactly how much you will pay.\nYou can use Hubstaff to pay independent contractors, remote employees, or freelancers. Hubstaff offers a payment solution that can be maintained right from within your account by integrating with international payment platforms like PayPal, TransferWise, Bitwage, and Payoneer.\nHubstaff tracks working hours automatically and maintains a record of which time logs you’ve paid and which ones you haven’t.\nIt simplifies remote time tracking and adds an extra layer of insight and reporting. Payments can be sent out automatically or manually. All your contractors have to do is download the desktop app and press start to track time.\nHubstaff will automatically calculate payroll based on their hourly rate and the time they have logged. You can also use Hubstaff’s reporting feature to view how many total hours they have worked over a specific date range and pay them accordingly upon project completion.\nBonus: A solution for managing your independent contractors\nWith a distributed team or outside contractors working on your projects, it’s very important to get everyone on the same page by using the right online project management tool. \nHubstaff Tasks provides teams with Agile features and automated Kanban boards. With Hubstaff Tasks, you can organize projects, assign tasks, and collaborate with teams using comments, file attachments, and more.\nTasks can also be organized into weekly sprints. Each task can go into the backlog, current sprint or the future sprint. You can easily keep your projects on track and see what your team is currently working on.\nHubstaff Tasks also has automated daily Stand-ups, making it easy for team members to report what they accomplished, what they’ll work on next, and any roadblocks.\n2. PayPal\n\nAsk anyone how to pay international employees, and PayPal is almost always the answer. PayPal is the largest online payments processor in the world with over 325 million active digital accounts in 202 countries.\nAt a glance:\n\nBusinesses around the world use PayPal to pay contractors and employees. This means that if you want to outsource, there is a solid chance that your contractor already has a PayPal account.\nPayPal offers flexible payment options. You can link your credit card or bank account to your PayPal account so that you are never short on cash.\nYou have easy access to PayPal funds via the website and mobile application.\nIf PayPal ever becomes insolvent, you lose any PayPal balances. This is because it isn’t a bank. PayPal balances are not FDIC-insured. The FDIC pass-through insurance they offer only protects transfers to your bank but offers no protection against PayPal insolvency.\nPayPal isn’t an option for everyone around the world. Even though most people around the world can receive a payment via PayPal, not all countries have withdrawal options to local bank accounts. Hence, you may end up paying your international employees overseas only for them to get stuck with PayPal balances which they can only utilize for online purchases.\n\nGlobal acceptance:\n\nAvailable in 202 Countries (full list)\n25 currencies supported:\n\nUSD, AUD, BRL, CAD, CHF, CZK, DKK, EUR, GBP, HKD, HUF, ILS, JPY, MXN, MYR, NOK, NZD, PHP, PLN, RUB, SEK, SGD, THB, TRY, and TWD\n\n\n\nTransfer fees:\n\nSenders pay 2.9% + $0.30 per transaction funded by credit card\nSenders pay nothing for transactions funded by bank account\nReceivers pay 2.9% + $0.30 for any transaction\nSource: PayPal\n\nConversion fees:\n\nAn undisclosed fee is built into their conversion rate (in practice this is often 3 to 3.5% higher than the true mid-market rate), in addition to any other fees for sending or receiving. You’ll have to calculate the fee in your PayPal account, according to this support article.\n\nEase of use for sender:\n\nDoes it require keeping a balance to cover payments?\n\nNo\n\n\nCan you pay via credit card?\n\nYes\n\n\nCan it be automated with Hubstaff?\n\nYes\n\n\n\nEase for receiver:\n\nDoes it go straight to their bank account?\n\nNo, goes to their PayPal account and takes 2 to 3 days to go from there to their bank account\n\n\nDo they need to create an account?\n\nYes\n\n\n\nWho is this best for?\nPayPal Web Payments is best for businesses that want to use a credit card to pay their team. If you are in the US, Bitwage may be cheaper if you are paying teams in the EU, India, Philippines, Mexico, or Brazil. Their exchange rates vary so you should check before sending.\n3. PayPal Payouts\nPayPal Payouts is PayPal’s mass payments platform. With lower fees and the ability to automate, it’s a better alternative to PayPal Web Payments if you’re sending payments to several team members on a regular basis.\nGlobal acceptance:\n\nSupports 24 currencies and 156+ markets around the world.\n\nTransfer fees:\n\nTo make domestic payments through the website, PayPal Payouts charges 2% per payment, capped at $1 USD per payment.\nFor payouts made through API, the fee is $0.25 USD per U.S. transaction.\nYou can also check out all fees for international payments.\nThe recipient pays nothing.\n\nConversion fees:\n\nThere’s a 2.5% charge for currency conversion (in practice this is often 3 to 3.5% higher than the true mid-market rate).\nPlus, a 1.5% international transaction fee to receive payments from another country.\n\nEase of use for sender:\n\nDoes it require keeping a balance to cover payments?\n\nYes, although you can set your account to be automatically funded to a certain amount if you have the PayPal debit card.\n\n\nCan you pay via credit card?\n\nNo\n\n\nCan it be automated with Hubstaff?\n\nYes\n\n\n\nEase for receiver:\n\nDoes it go straight to their bank account?\n\nNo, goes to their PayPal account and takes 2 to 3 days to get from there to their bank account.\n\n\nDo they need to set up an account?\n\nYes\n\n\n\nWho is this best for?\nEmployers who prefer PayPal can save time and money if they are sending payments to more than 10 people. PayPal Payouts is a good choice whether you’re working with full-time remote employees or several independent contractors.\nAt Hubstaff, we use PayPal Payouts to automate payroll for our team. Paying within the US is very cheap, and the costs for paying contractors overseas are reasonable. This is recommended for companies that are sending $20,000 or less a month, and are able to pre-fund their account without impacting cash flow.\nThis service is relatively cheap, but there are a few things to know:\n\nYou need a business account in order to be approved for Payouts.\nPayPal may refuse to approve you, often without giving a reason, or providing their criteria for approving accounts.\nPayPal may place a temporary hold on a transfer in the receiver’s account if they suspect the transaction wasn’t authorized.\n\nJust like with any PayPal service it’s great (when it works) because it’s easy and relatively cheap.\nBut when it doesn’t work, it can be difficult to get a resolution. This is why companies sending over $20,000 a month may be better suited to use a service like Payoneer or Transpay so that they have an account manager to can call if anything goes wrong.\n4. Payoneer\n\nPayoneer is a global payments, payouts processor and money transfer service. If you can get into a relationship with them, it is a good alternative to paying independent contractors worldwide.\nAt a glance:\n\nThey have a wide global reach. You can send payments to more than 200 countries in over 150 currencies.\nPayoneer offers multiple payout solutions including prepaid Mastercard cards and global bank transfers\nThe company is a regulated entity in the US and EU, and is licensed to remit funds globally.\nThey issue workers with a Mastercard debit card which allows contractors and employees to withdraw money from an ATM machine in their country.\nYou can manage your account using a mobile app that’s available for Android and iOS.\nYour contractor can withdraw the funds via the debit card provided with the account. Withdrawals can also be made to a bank account or web money account.\n\n\nYou cannot use Payoneer’s service unless you have a large number of workers.\nThe withdrawal fees are relatively high when compared with a service like PayPal. While PayPal charges an average of 3%, Payoneer charges between $2-$4 to load a prepaid debit card. The outsourced contractor is also charged $3.15 to withdraw and up to another 3.5% for currency conversion.\n\nGlobal acceptance:\n\nVery good coverage – Complete list\n\nTransfer fees:\n\nReceivers pay $1.50 transfer fee to a bank account in the same currency\nSender pays nothing\n\nConversion fees:\n\nExchange fees are up to 2% above mid-market rate, depending on the volume of your account; the more money you send through Payoneer, the lower the exchange fees will be.\n\nEase for sender:\n\nDoes it require keeping a balance to cover payments?\n\nYes, but for US companies who are funding $10 to 15k at a time, Payoneer can debit their bank account instead of having them initiate the transfer.\n\n\nCan you pay via credit card?\n\nNo\n\n\nCan it be automated with Hubstaff?\n\nYes\n\n\n\nEase for receiver:\n\nDoes it go straight to their bank account?\n\nIt can go directly to their bank or the receiver’s Payoneer account, depending on their preference\n\n\nDo they need to set up an account?\n\nYes. Accounts are manually approved, and sometimes additional documentation is required.\n\n\n\nWho is this best for?\nAnybody paying their team more than $20,000\/month should consider Payoneer. You can speak directly with the teams at Payoneer and Transpay to see which one is a better fit for your business.\n5.Skrill\n\nSkrill is a UK-based money transfer platform. They were named the Best Electronic Payment Solutions in Europe by the International Finance Magazine, Financial Awards 2014.\nAt a glance:\n\nThe service is popular with contractors in Eastern Europe, Asia and Africa due to the localized withdrawal options that they offer. For example, they have a service that allows outsourced workers in East Africa and some Asian countries to withdraw funds to mobile wallets.\nSkrill is also relatively cheap to use compared to a service like PayPal. Sending money costs 1.45% but the total fee is capped at a maximum of €10. But, as with all services, there is a currency conversion fee of 3.99% on top of wholesale exchange rate.\nThe main disadvantage with Skrill is that it doesn’t have a large enough uptake. In particular, the service isn’t popular in North America. Thus, it isn’t a viable option to pay contractors in this region.\nYou also have to login or make a transaction every 12 months, otherwise a $3 service fee will be deducted from your account.\nAs with PayPal, there is no protection afforded in the event of the company becoming insolvent.\n\nGlobal acceptance:\n\nUsed in nearly 200 countries for 40 currencies (although when it comes to sending money internationally, it seems you can only send to 35 countries).\n\nTransfer fees:\n\nTo send a payment, there’s a 1.45% fee (minimum of 0.50 USD). Receiving money is always free.\nUploading funds via bank transfer, Visa, Mastercard, or ACH is free.\nWithdrawing funds is free.\n\nConversion fees:\n\nSkrill adds 3.99% to wholesale exchange rates, which is a bit higher than the average.\n\nEase for sender:\n\nDoes it require keeping a balance to cover payments?\n\nYou’ll need to set up a Skrill account to send payments but you can link your bank account directly.\n\n\nCan you pay via credit card?\n\nYes\n\n\nCan it be automated with Hubstaff\n\nNo\n\n\n\nEase for receiver:\n\nDoes it go straight to their bank account?\n\nYes\n\n\nDo they need to create an account?\n\nNo, money can be sent to a mobile wallet or bank account. You just need an email address.\n\n\n\nWho is this best for?\nYou can send one-time or ongoing monthly payments, but if you’re looking for a more streamlined way to pay multiple remote workers with differing amounts each month, Skrill might not be right for you. That said, Skrill is freelancer- and recipient-friendly and offers convenient wallet features.\n6. Bitwage\n\nBitwage is a growing payment service that added 18 additional currency options in 2017. It’s built for remote workers and development teams, so its features are a great fit if your business falls in that category.\nBecause their rates are dependent on the method of payment, country, and currency, it’s best to explore your specific situation using their rate calculator. In some cases, Bitwage comes in below the mid-market rate, and other times it can be well above.\nAt a glance:\n\nThey support nearly every country with a “virtual savings account” through Uphold where users can then get their money via bank transfer (For the US and Europe) or ATM card (for other countries).\nAll international users also have the option of receiving a debit card provided by Xapo.\n\nGlobal acceptance\n\nSupports over 25 currencies.\nLocal bank-to-bank transfers for countries in the EU, Philippines, Mexico, Brazil, India, US (and soon Indonesia).\n\nTransfer fees\n\n0.50% + 0.50 USD per payroll charged to the employer to fund via ACH debit.\nFree to fund via ACH credit or bank wire (but your bank may charge a fee).\n3.50% + 0.30 USD per payroll charged to the employer to fund via Credit Card.\n\nConversion fees\n\nBitwage charges 1% above the market rate they are able to get, but the rate they are able to get varies based on the liquidity for that market.\n\nEase for sender\n\nDoes it require keeping a balance to cover payments?\n\nNo, but it costs 0.5% to have them pull the funds from your bank account.\n\n\nCan you pay via credit card?\n\nYes, but accounts start with a $500\/month limit (this can be raised over time).\n\n\nCan it be automated with Hubstaff?\n\nYes\n\n\n\nEase for receiver\n\nDoes it go straight to their bank account?\n\nYes\n\n\nDo they need to create an account?\n\nYes\n\n\n\nWho is this best for?\nBitwage aims to offer an easy to use service at an affordable price by only charging a 1% premium on the rates they get for currency conversions, however those rates vary significantly. Typically for MXN and BRL conversions, they are able to get very close to the mid-market rate, making them a great option for those countries.\nBecause the rates can vary so much by country, check their exchange rates for your situation to see if it is competitive with PayPal’s 2.5% (which in reality can be 3 to 3.5% or higher).\n7. Transpay\n\nUnlike some of the other payment services, Transpay is focused on business transactions with international teams or customers. Their features and payment options are tailored toward offering a cost-effective, scalable solution for businesses.\nAt a glance:\n\nLocal bank transfers can be complete in a few hours; cash transfers can happen right away.\nExtended reach thanks to availability in many countries.\nHard to decipher fees until you know the amount, time and method of payment.\n\nGlobal acceptance:\n\nVery good coverage – 90% in-market coverage in over 140 countries and 60 currencies. Source: Transpay\n\nTransfer fees:\n\nThe fees vary based on the country and volume, and in some cases they require a minimum monthly fee\/maintenance fee.\n\nConversion fees:\n\nThe exchange rate is quoted at the time the transaction is placed and varies by country.\n\nEase for sender:\n\nDoes it require keeping a balance to cover payments?\n\nYes, and accounts can be funded in USD, CAD, GBP, or EUR\n\n\nCan you pay via credit card?\n\nNo\n\n\nCan it be automated with Hubstaff?\n\nNo\n\n\n\nEase for receiver:\n\nDoes it go straight to their bank account?\n\nYes, they can also receive a cash payout in many countries\n\n\nDo they need to create an account?\n\nNo\n\n\n\nWho is this best for?\nTranspay is similar to Payoneer except they don’t require an account for the receiver. As mentioned above with Payoneer, it’s recommended to talk to sales reps at both companies to determine which makes the most sense as each will have different fees based on the countries you are sending to.\n8. Xoom\n\nXoom’s greatest strength is speed. The total time differs depending on where you’re sending money and the amount, but sending money to a bank account in India from the U.S. can be done in as little as four hours. For some banks and amounts, Xoom offers instant deposits.\nAs part of PayPal, Xoom covers the international part of payment services. Currently, U.S. to U.S. payments must be made in PayPal. You can choose to login with your Xoom or PayPal account.\nGlobal acceptance:\n\nSupported in 137 countries\n\nTransfer fees:\n\nFees vary by payment amount, method, currency and receiving option, but generally: $5.99 for transfers up to $500, paid for by the sender\nFree for transfers over $500\n\nConversion fees:\n\nVaries by country, but approximately 1 to 1.5% above mid-market\n\nEase for sender:\n\nDoes it require keeping a balance to cover payments?\n\nNo\n\n\nCan you pay via credit card?\n\nYes, but many credit cards process Xoom transfers as a cash advance which has additional fees that are often quite large\n\n\nCan it be automated with Hubstaff?\n\nNo\n\n\n\nEase for receiver:\n\nDoes it go straight to their bank account?\n\nYes, they can also receive a cash payout\n\n\nDo they need to create an account?\n\nNo\n\n\n\nWho is this best for?\nXoom is a good option for anybody paying a team that resides in countries not supported by PayPal, and is sending less than $20,000 a month in payments. If you want to use your bank account, TransferWise is most likely going to be the cheaper option.\nIt is also the easiest option if your remote workers want to receive a cash payout instead of a payment directly to their bank account.\n9. TransferWise\n\nTransferWise leads with a pretty compelling offer: the fairest exchange rate. Unlike other payment services, TransferWise doesn’t add a premium to the wholesale (mid-market) exchange rate. That means you end up paying only what you have to for currency conversion.\nAt a glance:\n\nYou only pay the mid-market exchange rate, which is the lowest available.\nUpfront estimate of fees and rates helps you feel confident before you send money.\nWith only 59 countries available, TransferWise’s reach is more limited than others.\n\nGlobal acceptance:\n\nCurrencies for funding the transfer: AUD, AED, ARS, BDT, BGN, BRL, CAD, CHF, CLP, CNY, COP, CZK, DKK, EGP, EUR, GBP, GEL, GHS, HKD, HRK, HUF, IDR, ILS, INR, JPY, KES, KRW, LKR, MAD, MXN, MYR, NGN, NOK, NPR, NZD, PEN, PHP, PKR, PLN, RON, RUB, SEK, SGD, THB, TRY, UAH, USD, VND\nCurrencies that transfers can be received in: AUD, BGN, BRL, CAD, CHF, CZK, DKK, EUR, GBP, HKD, HRK, HUF, JPY, NOK, NZD, PLN, RON, SEK, SGD, TRY, USD\nSource: TransferWise\n\nTransfer fees:\n\nDifferent for each country, but the rates for from GBP have been reduced to 0.37% + £0.76\nSome countries have additional discounts for larger volumes\nYou can read their documentation for the complete fee structure\n\nConversion fees:\n\nThere are no additional conversion fees\n\nEase for sender:\n\nDoes it require keeping a balance to cover payments?\n\nNo\n\n\nCan you pay via credit card?\n\nNo\n\n\nCan it be automated with Hubstaff?\n\nYes\n\n\n\nEase for receiver:\n\nDoes it go straight to their bank account?\n\nYes\n\n\nDo they need to create an account?\n\nNo\n\n\n\nWho is this best for?\nIf you are sending less than $20,000 monthly, TransferWise is the best way to pay contractors that reside in countries not supported by PayPal, like Pakistan or Bangladesh. For countries where PayPal’s Payouts is an option, TransferWise will always be cheaper for the receiver, and if you are sending more than $150 it will be cheaper for you as well.\n10. Wire transfer, Western Union, and other money transfer services\n\nWire transfer has been around for at least half a century, and is the oldest among all the money transfer methods. Money transfer services like Western Union and others are fairly recent.\nAt a glance:\n\nThe main advantage is that they are uncomplicated and pretty much everyone understands them. In fact, they are the safest option for sending payments to foreign contractors because anyone from any part of the world can receive a Western Union payment or wire transfer.\nThey are a great option to pay independent contractors in countries where services like PayPal don’t offer a local withdrawal option.\n\n\nWire transfers take time and are not cost efficient for small amounts.\nSending an international wire transfer takes a minimum of three days for the money to hit the employees account. In most cases, it takes about a week. This is disadvantageous given that prompt payments tend to motivate workers.\nThey are time consuming. Making a payment via wire transfer or Western Union — even if you are using a web application — isn’t automated, and can take longer to complete.\n\nGlobal acceptance:\n\nUsed in over 200 countries and 130 currencies, with over 500,000 agent locations\n\nTransfer fees:\n\nSending money from bank account to bank account has a $.99 USD fee\n\nFor cash pickup, add a fee up to 10%; to use a debit or credit card, add a 2 to 8% fee depending on the amount\n\n\n\nConversion fees:\n\nWestern Union has a helpful tool for finding out exactly how much your transaction fees will be, but expect a higher conversion fee overall, up to 6%\n\nEase for sender:\n\nYou can send money online, stop into a Western Union location or send by phone. In that way, Western Union has plenty of options. Just know that the method you use to send money may influence your fees (the more convenient, the higher the fees).\nDoes it require keeping a balance to cover payments?\n\nNo\n\n\nCan you pay via credit card?\n\nYes\n\n\nCan it be automated with Hubstaff?\n\nNo\n\n\n\nEase for receiver:\n\nMuch like sending money, you have options when it comes to how you want to receive the money. It can be sent straight to a bank account, to one of the 500,000 agent locations around the world, or via mobile app.\nDoes it go straight to their bank account?\n\nYes\n\n\nDo they need to create an account?\n\nNo\n\n\n\nWho is this best for?\nWestern Union is a good option when being able to withdraw money locally is important. It’s not the fastest process, especially international wire transfers, but it can be convenient for both sender and recipient.\n11. Escrow via freelance websites\nFreelance websites are one of the easiest ways to find contractors.. The most popular are Upwork, Freelancer and PeoplePerHour. Because payments are handled by the same platform where you manage your remote workers, it is one of the most convenient contractor payroll solutions.\nFreelancer platforms offer payment methods where they take care of the money transfers from your account to your freelancer’s. For some, if you don’t have enough funds in their internal systems, they charge your account or credit\/debit card along with their fee. Once the funds are transferred, your remote employees are free to use their hard-earned money.\nAt a glance:\n\nThe biggest advantage of freelance websites is the escrow feature. Escrow protects both the employer and employee. Once funds are paid into escrow, the employer has peace of mind that the employee will only access funds once they have completed the job in accordance with the job description and agreement.\nFreelance websites have a number of withdrawal options, making payments very convenient. For example, a site like Upwork allows contractors to withdraw funds using PayPal, bank transfers, checks, Skrill and Payoneer.\nWhile using these platforms to pay your international contractors gives you peace of mind due to the escrow service, it also takes away an element of control from you. You aren’t entirely in charge of the hiring process. If, for example, there is a dispute, the freelance site’s dispute resolution panel can rule against you and release the funds to the worker.\nAs with PayPal, any funds held by a freelance site are not protected in the event of insolvency. Rather than place too much money in escrow, it’s recommended to break up the project into smaller chunks and fund the milestones one at a time to reduce the insolvency risk.\nIf you are paying by the hour, it is difficult to ascertain if the worker actually worked for the number of hours billed.\n\nGlobal acceptance:\n\nPayment through Upwork, for example, is available in 188 countries\n\nTransfer fees:\n\nUpwork charges a 3.00% processing fee per payment\n\nConversion fees:\n\nUpwork doesn’t seem to disclose their conversion fee, which has led to some confusion among customers.\n\nEase of use for sender:\n\nDoes it require keeping a balance to cover payments?\n\nNo, you can pay with Mastercard, Visa, American Express, Discover, or PayPal\n\n\nCan you pay via credit card?\n\nYes\n\n\n\nEase for receiver:\n\nDoes it go straight to their bank account?\n\nYes\n\n\nDo they need to set up an account?\n\nYes\n\n\nOne thing to know about Upwork is that they have significant fees for people who get paid through the platform. Make sure your team is aware before setting up payment.\n\nWho is this best for?\nPlatforms like Upwork are best for recipients and clients that have ongoing projects. The fees Upwork charges freelancers go down to 5% once they’ve billed $10,000. Up until that point, freelancers take a significant cut just to get paid through the platform.\nFor businesses, paying through Upwork can be easy enough because of the multiple payment methods it supports.\nWhich payment method is best suited for you?\nWhen making a decision on how to pay remote employees and contractors, you shouldn’t base your decision on which platform is the cheapest. Make sure that you select the one that’s the most convenient for your business, and supports all the countries in which your contractors are based.\nWere you able to determine which of the payment methods mentioned above is best for your business? Are there any payment platforms that you use that are worth mentioning? Let us know in the comments below.\nRead our other articles on money transfers:\n\nEasy ways to send money to India\nHow to send money to Colombia\nHow to send money to the Philippines\nHow to send money to Ukraine\nHow to send money to Brazil\nHow to save money on payroll\n\nThis post was originally published in December 2014. It has been updated in April 2019 and July 2020 for accuracy, and to include more relevant payment systems.