Hiring Your First International Contractor

For a one-person business hiring one genuinely self-employed person abroad, you need three things: a written contract with a defined scope, a way to pay them that doesn’t destroy the amount in conversion, and whatever tax form your side requires on file. You do not need an Employer of Record, and buying one at roughly $599 a month to pay a freelancer is the most expensive mistake available in this category.

That’s the honest short answer, and it’s worth saying up front on a page where I’d earn a commission if you bought software. Sometimes the right tool costs nothing.

I come at this from both directions. I’ve been the contractor in cross-border arrangements for years — an Italian sole trader invoicing companies abroad — so I know exactly which parts of a client’s setup make the relationship easy and which make it painful from the other end. That’s a useful thing to know when you’re the one hiring.

The three tiers, and which one you’re in

The category is confusingly marketed, so here it is plainly:

Tier	What it’s for	Rough cost
Nothing — contract + invoice + bank transfer	One or two stable, clearly independent relationships	Bank fees only
Contractor management (Deel, Remote and others)	Several contractors; you want compliant contracts, a paper trail and payouts handled	~$49 per contractor / month
Contractor of Record	You want the misclassification risk transferred off you	~$325 per contractor / month
Employer of Record	The person should genuinely be an employee, in a country where you have no entity	~$599 / month + local taxes and benefits

Most readers of this site are in row one or row two. If you’re paying one writer for four articles a month, row one is fine. If you’re up to four or five people across three countries and spending your Fridays chasing invoices, row two starts paying for itself in time alone.

The jump to row four is not a scale-up of the same thing — it’s a different legal arrangement for employing someone. Buy it only if you’re employing someone.

What you actually need, in order

1. A written contract with a defined scope

Not a template you didn’t read. It should name the deliverables, the rate and payment terms, who owns the work product, and that the engagement is non-exclusive with a defined term or defined scope.

This protects you commercially, and it’s also the first thing that distinguishes a contractor relationship from an employment one. The tests that decide classification look at the substance of how you work together — control over hours, integration into your team, economic dependence — so an open-ended “just be available” arrangement is the risky shape, regardless of what the document is called. That’s the client’s exposure, and as of this page, the client is you. (The full picture, written from the contractor’s side →)

2. A payment method that doesn’t quietly cost 4%

This is where most first-timers lose money without noticing.

• PayPal is easy and, once currency conversion is involved, usually the worst value. The transaction fee is visible; the conversion margin isn’t.
• A plain bank transfer is fine within a currency zone. Across zones by SWIFT, intermediary banks can each take a cut in transit, and your contractor receives less than you sent — which they will notice and, reasonably, resent.
• Wise or a multi-currency account lets you hold and send in the currency your contractor actually wants. If you’re being paid in several currencies yourself, receiving into an account that holds them also means you can pay out of the same currency rather than converting twice.
• A contractor platform handles the payout as part of the subscription.

The rule that saves the most: pay people in their own currency where you can, and don’t let a rail convert automatically on arrival. The visible fee is rarely the expensive part; the exchange-rate spread is.

3. The tax paperwork

Depends on where you are, and it’s the gate that silently stops payments. If you’re a US payer engaging a non-US contractor, you’ll generally need a W-8BEN on file before you can pay in full, otherwise withholding rules apply. If you’re an EU business, you’ll want your contractor’s VAT details and to understand how their invoice should be treated — and if you’re the one being invoiced from Italy, this is what a correct invoice looks like.

Ask for the paperwork at the start of the relationship. Asking for it when the first payment is already late is how you start badly with someone you want to keep.

When a platform is genuinely worth $49

Being fair rather than promotional about this:

Worth it when — you have three or more contractors; they’re in different countries; you don’t want to write or maintain contracts; you want one place for invoices at year end; you’re uneasy about compliance in a country you don’t know; or your time is genuinely worth more than the fee, which at a few people is a low bar.

Not worth it when — you have one contractor you’ve worked with for two years; you’re both in the same currency zone; they invoice you properly and it works; or you’re paying so little that $49 a month is a meaningful share of the engagement.

That last one is worth stressing. If you’re paying a VA $300 a month, a $49 platform fee is 16% overhead. Send an invoice and a bank transfer.

See what contractor management includes→

The alternatives, fairly

I’d earn from Deel, so here’s the field rather than a sales pitch:

• Remote — the closest direct comparison and generally better regarded on pricing transparency, with its full pricing published.
• Rippling — broader platform covering HR and IT as well; modular pricing that’s harder to predict, and thinner EOR country coverage.
• Oyster — similar category, typically priced a little above Deel.
• Papaya Global — enterprise global payroll. Genuinely not for a one-person business; named so the list is complete.
• Nothing at all — a contract, an invoice and a transfer. Still the right answer for a lot of people reading this.

On third-party review scores, Rippling and Remote both rate above Deel for user satisfaction. Deel’s advantages are country coverage and a straightforward published price for the contractor tier. Weigh that yourself.

What good hiring looks like from the other side

Since I’m usually the contractor, the things that make a client easy to work with — and that cost you nothing:

• Say the payment terms before the work starts, and honour them.
• Approve invoices promptly. On contractor platforms the money doesn’t move until someone on your side clicks approve; that someone is you.
• Pay in their currency if you can.
• Ask for the tax form on day one, not when the payment is stuck.
• Don’t ask for employment-shaped commitments — fixed daily hours, exclusivity, managing your staff — while paying contractor rates. It increases your own risk and it reads badly.

Do those five things and you’ll keep good contractors for years, which is worth more than any platform feature.

Frequently asked questions

Do I need an Employer of Record to hire someone in another country?

Only if you are employing them. An EOR legally employs a person on your behalf in a country where you have no legal entity, and costs roughly $599 per person per month plus local employment taxes and benefits. If the person is genuinely self-employed — their own business, other clients, control over how they work — you need a contract and a payment method, optionally with contractor management at roughly $49 per contractor per month. Buying an EOR to pay a freelancer is about twelve times the necessary cost.

What is the cheapest way to pay an international contractor?

For a single contractor in a stable arrangement, a written contract plus a direct bank transfer is the cheapest and is entirely legitimate. Within a shared currency zone, such as SEPA in Europe, it is also fast and predictable. Across currencies the deciding cost is the exchange-rate margin rather than the visible fee, so paying in the contractor’s own currency from an account that holds it usually beats letting a payment rail convert automatically. Watch SWIFT transfers, where intermediary banks can deduct fees in transit and your contractor receives less than you sent.

What do I need before paying a contractor abroad for the first time?

Three things. A written contract naming the scope, deliverables, rate, payment terms and ownership of the work, stated as non-exclusive. A payment method that does not lose a large share to currency conversion. And whatever tax documentation your jurisdiction requires on file — for a US payer engaging a non-US contractor that is typically a W-8BEN, without which withholding rules apply. Collect the paperwork at the start of the relationship rather than when the first payment is already late.

Is Deel worth it for one contractor?

Usually not. At roughly $49 per contractor per month it is good value once you are managing several people, across different countries, or you want contracts and invoices handled and a single record for year end. For one long-standing contractor in the same currency zone who invoices you properly, it adds a subscription and a withdrawal step without solving a problem you have. If you are paying a small monthly amount, the fee can also be a meaningful percentage of the engagement.

Can I just pay an international contractor with PayPal?

You can, and plenty of people do, but it is generally the most expensive common option once currency conversion is involved, because the conversion margin is applied on top of the visible transaction fee and is not itemised. It also gives you a weaker record than a proper invoice if you ever need to demonstrate the nature of the relationship. If it is what your contractor prefers, use it — but compare what actually lands in their account against a transfer in their own currency before assuming it is the easy choice.

Related reading

• Getting paid across borders — the same four problems, from the receiving end.
• Contractor or employee? — what you’re actually exposed to, and how to structure around it.
• Deel from the contractor’s side — what your contractor experiences when you put them on it.
• How affiliate networks actually pay you — if the money you’re paying out came from networks in the first place.