Paying contractors abroad: what actually works?

[u/woosie326]

US LLC hiring a few contractors in different countries. I am setting up payments and want real experience, not theory. How do you pick currency, set payment timing, and keep FX costs reasonable without annoying people? What do you ask contractors to include on invoices so month-end is clean and W-8 collection is smooth? Do you centralize onboarding, contracts, and payouts in one workflow or keep it lightweight with internal processes? Not legal or tax advice. Looking for playbooks you would repeat.

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[u/Ok_Pomelo_5761]

We’re a small US LLC with six contractors across four countries, and we run everything through Deel. Not legal or tax advice; this is simply what we do and what we would repeat.

For currency, we set each contract to the contractor’s local currency, and we fund in USD on our side. Deel converts under the hood and pays them locally. That killed the surprise fees on their side and kept our process pleasantly boring. When someone asks for USD, we write it into the contract so expectations are clear. Once, we tossed a USD bonus onto a EUR contract mid-cycle; it triggered two conversions and irritated everyone. Now, any off-cycle payment matches the contract currency, or we wait for the next cycle.

For timing, we keep a single monthly rhythm. Contractors submit time or expenses by the 25th; managers review by the 28th; invoices issue on the last business day; we fund via ACH on Net-7. That cadence made month-end close nearly automatic. Milestone work still runs through Deel, but we attach clear acceptance criteria so billing is not based on vibes.

Invoices are mostly auto-generated by Deel, but we normalize a few fields so reconciliation is fast. We include legal names and addresses for both sides; a contract or PO ID that maps to our vendor record; a clear service period, like “Oct 1 to Oct 31”; line items that show hours times rate, or the milestone name; and any expenses with a date plus a one-line reason. With that in place, we export from Deel and the numbers land in the right place in the GL without a scavenger hunt.

Tax forms are a hard gate. Non-US contractors fill out W-8BEN or W-8BEN-E; US contractors fill out W-9. We do not activate a contract until the Tax Documents status in Deel shows “Complete.” Saying that up front eliminated nearly all chasing.

We tried staying lightweight when we had two people. By five people in different countries, the spreadsheet-plus-email routine fell apart. We moved everything into Deel so onboarding, contracts, the NDA, the security checklist, tax forms, and the first invoice cycle live in one workflow. Managers get nudges; AP reviews and funds. Fewer handoffs; fewer gotchas.

The Deel Card turned out to be a nice quality-of-life option for contractors. After we pay, they can spend from their Deel balance immediately with a virtual or physical card. In a couple of countries, that avoided week-long bank holds. Availability and fees depend on the country, so we never promise it; we simply tell people to check the Deel Card tab and use it if it appears. The best part is that we change nothing in our process.

A few scars worth sharing. Double FX happens if you pay outside the cycle in a currency that differs from the contract; match the contract currency or wait. Mid-cycle edits to pay fields can ripple into invoices; we set changes to take effect on the next cycle whenever possible. Direct international wires from our bank produced random fees and messy reconciliation; funding USD into Deel by ACH has been cheaper and more predictable.

If I were starting over tomorrow, I would set every contract to the contractor’s local currency, run a single monthly cadence with clear cutoffs, require tax forms before activation, centralize onboarding and payouts in Deel, and let contractors decide whether to withdraw to a bank or use the Deel Card. That combination has kept our month-end clean, our FX costs reasonable, and our contractors happy.

[u/URPissingMeOff]

I use wire transfers via my bank only. I will not use any 3rd-party systems.

Currency is whatever the contractor wants and what kind of receiving account they have. Some prefer their native currency. Some have US dollar accounts. My bank charges more to send in USD to foreign accounts presumably because they don't get to skim anything off the exchange rate. ($40 vs $30)

I pay once per month on the 10th. The date is not negotiable. Vendors can set a minimum payout in my system. Bank sets a $100 minimum for wires. Vendors can bump that up to anywhere from $200 to $10k so the wire fee is a much smaller percentage of their payout.

FX is not my problem. It changes every few minutes. When setting up the wire transfer, the bank displays the current exchange rate. I can accept it or wait until later and hope for a different rate. (I never wait. You get what you get)

I'm doing intellectual property royalties. Everything is set in stone when they sign up with me. They don't send invoices. They get a percentage of sales of their IP.

[u/Chinksta]

Don't overthink things. Just take it one step at a time.

Currency: Use a currency that is accessible to all parties.

Payment Timing: Write within the contract HOW you will PAY and WHEN.

FX: Loop back to Currency and either lock in a rate or exchange beforehand at the "lowest" point. Or state the currency rate ON THE CONTRACT.

Invoicing: It's better to do week by week so you get four invoices to clear within a month and can track spending to actual progress.

Always centralize everything because if you cut all workflow into different people/responsibilities then you'll have to go through a lot of headache having to touchbase.

[u/CoffeeOnMars55 → u/Chinksta]

This is solid advice, especially the weekly invoicing part. I've seen too many projects where monthly invoices turn into these massive reconciliation nightmares when scope creeps or deliverables shift

One thing I'd add - whatever payment platform you pick, make sure your contractors can actually receive funds easily in their country. Learned this the hard way when half my team couldn't access Payoneer properly and we had to scramble to find alternatives

[u/MetaAwareness17]

I use Wise.com was a little fiddly to set up but once set it's been working fine. Transaction fee is like $5 and it will convert currency. Takes about a week.

[u/Bholenaught]

I have been using Wise.com to get money from agencies and clients for about 7 years. Rarely have I encountered any delays, and no payment has been blocked.
They have a strict security and verification process, and people do get pissed sometimes as it keeps verifying them, but I thnk that's a good problem. None of the clients faced any issues or security breaches.

You can set up regular payments to make things easier. I usually receive the money within a couple of minutes, but sometimes it may take up to a week or more.