It’s the last week of the month. Your designer in Manila, your developer in Pune, and your copywriter in Bogotá each sent an invoice in three different formats, requesting payment in three different currencies. Meanwhile, even though all of you delivered the campaign work, the client hasn’t paid you yet.
An overseas contractor team gives your agency skilled talent and flexible capacity. It can also turn payday into a small project of its own. Our guide shows you how to set up contractor payments that arrive on schedule, protect your margins, and build trust with your team, from the first contract to the monthly payment run.
The short answer
Treat paying your contractors the way you treat a client project: agree on the scope and terms up front, set a schedule, and run the same checklist every time. Before a contractor’s first invoice, settle four things:
- How their work is classified
- What currency they’re paid in
- How their payout details are collected
- When they get paid
Once those are in place, payday becomes a routine instead of a scramble.
Step 1: Confirm they’re contractors, then collect the paperwork
An independent contractor is a self-employed person who decides how and when the work gets done, then invoices you and handles their own taxes. An employee works under your direction and is paid through payroll. The difference matters: treating an employee as a contractor can lead to back taxes and penalties, explained in our guide independent contractors vs employees.
Agencies often drift into managing contractors like they would employees. A freelancer hired for one project can end up working fixed hours, in your tools, for a single client, under close direction. Review the relationship whenever the scope changes.
Next, collect the tax documents your country requires. In the U.S., a business paying an individual contractor abroad generally collects Form W-8BEN, which certifies they’re a foreign person, instead of the W-9 used for U.S. contractors. See W-9 vs W-8BEN and what the IRS requires when paying foreign contractors. Rules differ in other countries, so check with your accountant.
Step 2: Collect payout details safely
To pay someone abroad, you’ll usually need their full legal name exactly as it appears on their account, plus their bank details. Depending on the country, that could be an account number and a SWIFT code, the 8- to 11-character code that identifies a bank internationally. It could also be an International Bank Account Number (IBAN), which is used across Europe and many other countries. Some contractors prefer a mobile wallet instead.
Gather these details through one channel and store them securely. If a contractor emails new bank details, confirm the change by phone or video call before you pay. Switched account details are a common sign of payment scams.
With Remitly Business, Send by Link skips the collection step altogether. You start the payment with your contractor’s name, email address and phone number, and they enter their own payout details through a secure link, with no Remitly account needed on their end. It’s available to US businesses paying individual contractors and freelancers.
Step 3: Match your pay schedule to your cash flow
Agencies are often navigating financial timing gaps. Contractors will invoice you when the work is done, but the clients may pay 30, 60 or even 90 days later. When it comes to paying international contractors, decide how you want to time their payments in accordance with your cash flow, then put those delivery dates in every contract.
Common options include:
- A fixed date each month, covering all invoices received by a pre-determined cutoff date
- A set number of days after each invoice, such as 15 days
- Milestone payments, released when a deliverable is signed off
Whichever option you choose, keep to it. Contractors value predictability, and a record of paying on time helps you keep skilled people on your roster. Build in a buffer, too: public holidays and extra checks in either country can delay overseas payments.
Step 4: Decide on currency and who covers the costs
The exchange rate is the price of moving one currency to another, and they often fluctuate. If you quote a client in USD and pay a contractor in Indian rupees, moving exchange rates can change your project costs between the initial quoting and the actual payment.
You have two main options:
- Agree to pay the contractor fee in your currency, and then they receive whatever amount the payment converts to once it’s received.
- Or, agree to pay the fee in their currency, so they receive a set amount and you absorb any rate movement.
Paying in local currency is usually friendlier for contractors, so you can choose to add a small buffer to client quotes that will cover rate swings.
Agree on who covers transfer costs as well. With some bank wires, intermediary banks (banks that pass the payment along between yours and your contractor’s) can deduct fees in transit, so your contractor receives less than they invoiced. Our breakdown of what an international wire really costs shows where costs like additional transfer fees can hide.
Step 5: Run payday as a batch, then reconcile
Once every contractor is set up, establish a cut-off date for invoices so that you can pay them together on the same day instead of one by one as invoices land. A single run means one review of the amounts, one approval, and a single time to reconcile payments against invoices and project budgets.
Remitly Business bulk payments are built for this kind of payday. Select up to 20 saved recipients, review every amount, fee and total in one view, then send them as a single transaction, which gives you one record to reconcile instead of dozens.
Keep a record of each payment: the invoice, amount sent, exchange rate, fee and confirmation. It supports your bookkeeping, client billing, and any tax questions later. To create a routine that anyone on your team can run, see how to build a repeatable international payment process.
Your contractor payment setup at a glance
| Decision | Common options | Considerations |
| Worker status | Independent contractor or employee | How much you control their work and hours |
| Tax paperwork | Depends on your country (in the U.S., W-8BEN for individuals abroad) | Collect documentation before the first payment |
| Payment currency | Your currency or theirs | Who absorbs exchange rate movement |
| Pay schedule | Monthly date, days after invoice, or project delivery milestones | Your clients’ payment terms |
| Payout method | Bank deposit, mobile wallet, or cash pickup | What’s available in their country |
| Records | Invoice, receipt, rate, and fee | Reconciling against project budgets |
Mistakes to avoid
- Paying from details in an old email. Accounts change. Confirm details before the first payment and whenever your contractor’s payout details change.
- Letting a contract role turn into an employee. Fixed hours and close direction can blur the line, so revisit classification when the scope changes.
- Quoting clients without a currency buffer. An exchange rate swing can wipe out a thin project margin. Add a buffer to your client quotes to account for fluctuations in the exchange rate before contractor payments are due.
- Paying ad hoc. Transfers sent on different days are harder to track and easier to get wrong. See 7 international payment mistakes small businesses make.
- Ignoring mismatched details. For example, if the recipient name doesn’t match their bank records, the payment may be held or returned. Make sure to pay attention to these details.
How Remitly Business helps agencies pay their teams
Remitly Business is built for small businesses that pay people abroad, including agencies with contractor teams. You can pay from the bank account you already use to recipients in 175+ countries across 100+ currencies. Before you confirm the payment, you see the fee, the exchange rate, and the amount your contractor will receive.
For new contractors, Send by Link lets you start a payment with just their name, email address, and phone number. You send them a secure link, then they add their own payout details, so you don’t have to collect or store them. On payday, bulk payments let you pay up to 20 saved recipients in one workflow and review every payment in one view.
That way, you and your team stay focused on client work, and payday runs on a routine.
Common questions
Should I pay overseas contractors in my currency or theirs? Either can work, but agree on the currency upfront so that both of you understand who carries the exchange rate risk, or the price of converting one currency to another. When you agree to pay your contractor in their currency, then they get to receive a predictable amount, but your costs can shift. If you pay in USD, then your contractor absorbs this cost.
Do I need a business bank account to pay overseas contractors? Not always. Requirements depend on your country and business structure, explained in our guide to paying contractors without a business bank account.
How often should an agency pay its contractors? Many agencies choose to pay monthly or when pre-determined project milestones are met. What matters most is that a schedule has been written into the contract and you stick to it.
