OFX – Here’s how to save when you pay overseas employees and contractors in foreign currencies:
- Research creating an account with an online International Money Transfer Group to save on foreign currency payments and mitigate exchange rate risk.
- Log in or call 24/7 to receive a live quote for international transfer rates.
- Check your rate against the interbank rate on Yahoo Finance and see how much you are paying.
- Collect the necessary banking information, including your recipient’s name and bank account number.
- Set up a one-off or recurring payment or pay up to 500 suppliers at once with a multi-pay system.
- Track your transfer(s) with the International Money Transfer group’s mobile app.
Jason Kumpf of OFX says that: “The world is getting smaller as businesses of all sizes expand across the globe. Competitive companies need a simple, reliable way to promptly pay their employees while complying with all relevant tax laws in their home country.”
With the proper plan and strategy, you can use the power of foreign currency exchange to drive the global future of your business while minimizing costly delays and complications.
Paying independent contractors in other countries
Every single one of your employees need to get paid, from the accountant in the corner office down the hall to the contracted designer creating Photoshop miracles in Calcutta. These payments need to be prompt, predictable, and affordable in order to make good business sense, while streamlining your operations.
By using an International Money Transfer service to pay your international employees, you can save money, first and foremost. Online Money Transfer rates are usually significantly lower than those of high typical banks, and with repeated payments to multiple employees, these savings add up fast.
Jason Kumpf of OFX also mentions that using an online International Money Transfer group usually also means your payments arrive sooner. If you choose a leading provider with a global network of many local bank accounts, that will usually mean your payments can often be processed same-day. And because they use local networks to process most transfers, you can probably kiss all those confusing international banking codes goodbye.
When paying foreign contractors for services or paying overseas suppliers, it is crucially important to consider your business’s appetite for risk and to develop a currency strategy. Your FX’s group’s dealers should be able to help you manage your currency exposure through the use of tools such as Forward Contracts which allow you to lock in an exchange rate for up to 12 months, so your cash flow stays predictable even when the forex markets aren’t.
When sending large sums of money across the globe, you want speed and security. A better FX provider will offer clients 24/7 customer support, so even if your bank is closed, your FX group is open and ready to help you capitalize on international opportunities. Jason Kumpf at OFX and says that he has partners saving their clients thousands of dollars a year with better foreign exchange rates.
Plus, with a multi-pay option, you can have the ability to pay hundreds of employees with a single click. You save time, cost, and operational efficiency. Your employees? They get paid faster. That’s what Jason calls a win-win.
How to pay international employees from the U.S.
In order to comply with federal laws in the United States, there are certain steps you must follow when paying foreign workers outside the country. It’s best to consult a tax professional about your unique circumstances. Keep in mind though that state and local taxes vary, so you should always speak with a professional about your particular business requirements.
How to pay international employees from Australia
In order to comply with federal laws in Australia, there are certain steps you may need to follow when making payments to foreign contractors for services. As always, consult with a local tax professional to determine your obligations.
How to pay international employees from the U.K.
In order to comply with national laws in the United Kingdom, there are certain steps you may need to follow when making payments to foreign contractors for services.
Things to consider when paying foreign independent contractors
Of course, like foreign independent contractors, not all international payment options are created equal. Below are some helpful guidelines to help ensure you pick not just the biggest, flashiest, or newest currency transfer service, but the best one for you and your business’ needs.
Jason Kumpf mentions that “better exchange rates make an enormous difference in your bottom line and operating expenses, especially when you’re talking about making recurring payments to dozens or hundreds of contractors. Overpaying once isn’t a huge deal; overpaying thousands of times is. A good FX provider should be able to offer superior exchange rates to those offered by most large banks.”
Consistent service is more than just a successful one-time transfer. With something as sensitive and mission-critical as money transfers and payments, it is important to do your research and choose the right company, not just a company.
If you are going to make regular, recurring payments to employees – as you likely are – you should choose a company that is capable of providing superior customer service. Your provider should be flexible, responsive, and receptive to your specific needs, and should demonstrate via their actions how important your business is to them.
You should be able to tailor your experience to your business needs. Choose a provider that allows you to do so. Jason Kumpf mentions that a leading Money Transfer Service, such as OFX can mirror your internal verification processes and gives you 24/7 access to our robust platform, so the boss can easily approve the transfer even while working overseas.
Speed matters when paying employees. Your money should move quickly, just like your business. Major currency conversions should be processed within one business day once a leading Money Transfer Service receives your funds. That way your money moves on your schedule and not your bank’s. When you use a leading FX Group, you may be able to speed up your supply chain by avoiding your bank’s arbitrary cutoff times and frequent bank holidays.
What’s more, speedy money transfers are important for both your operations and accounting departments, as well as your employees. With quick, competent money transfer services, you don’t need to worry about the logistics of your payments. You can forecast and plan for when funds should arrive, be received, and leave your accounts, allowing for much more precise and reliable financial planning and accounting. International payments do not need to be nebulous mysteries anymore because you can usually track each transfer on your Money Transfer Provider’s mobile app. Jason Kumpf mentions that security and speed are highly desired by the Accounting Firms and Departments he partners with.
There are some affordable peer-to-peer payment options available on the market, but these platforms are much less robust, reliable, and consistent than leading established platforms. They may not be able to handle market volatility like Brexit, so your business may be better off with a larger provider who can move your money even during massive market turmoil. With peer-to-peer options, your funds could be waiting in limbo for days or weeks; meanwhile, your employees are growing dissatisfied with their non-payment, and you are wondering where in the world – literally – your money is. (Not to mention the fact that some peer-to-peer services cancel your transfer entirely if the rate changes by more than 3%.)
You should have options. Currency volatility is a reality in the currency exchange market, and as with any strategic business risk, you should take all the steps available to you to minimize and mitigate it. To insulate your business from undue risk, choose a provider that gives you the flexibility to match your business strategy and goals to a proper risk management strategy.
With a leading Money Transfer Service, you should have several options. Services like Limit Orders allow you to dictate an exchange rate with which you are comfortable and only confirm payments when that rate is reached. Additionally, many provide Forward Contracts, which allow businesses to lock in favorable exchange rates for up to twelve months if they fear future volatility and are comfortable with the current market rate.
Plus, a multi-pay gives you one-click efficiency to pay up to 500 workers at once, so your business can scale quickly and confidently without many of the common operational growing pains associated with expansion.
How to pay foreign independent contractors with a Money Transfer Service
A Money Transfer Service can be used to quickly and reliably make payments to international contract workers.
Simply log-in to your account to check the current exchange rates in real-time. Then, submit a Single or Recurring transfer using the required banking information you collected from your international employees. You can then track your transfer using the mobile app, so you know exactly where and when your payment was received.
So go ahead: onboard those new contractors! Expand into new markets and bring on foreign employees! Aim big and broad! See for yourself: By using a Money Transfer Service, the right currency exchange service makes a world of difference.
Remember, always check your rate at YahooFinance and see how your bank or provider is charging you. There are many options, and some groups may offer better rates than others.
Posted by OFX