Ask HN: How do you pay your remote workers located in various countries? | Hacker News Reader

Ask HN: How do you pay your remote workers located in various countries?

37 pointsjustboxing43 comments

I'm about to hire 1 remote worker / freelancer working out of Barcelona, Spain (US Citizen) and another working out of India (Indian Citizen).

I previously hired a remote worker out of Ukraine and after he completed a small job, found out that I couldn't pay him through paypal. Ukraine has some laws that make it difficult. So the only way was to open an UpWork account and grant him a private gig and then pay him through them. UpWork charges the client (me) 10% or 20% which is ugly.

So I would like to know how you pay your remote workers as freelance contractors, if you are in a situation similar to mine, without ending up having to eat expensive fees, or violating any US or remote workers' country's tax laws.

Costs, Fees, reliability #s would be great!

[P.S. I'm based in San Francisco, California]

View on HN

Bank transfers are probably the best way to handle this. I'd suggest to pay employees directly to their bank accounts from company account. And have company eat the transfer fees as business expense.

Another questions is how would you define salaries of your employees across various countries. As exchange rates could go up and down a lot. So you'd probably define salaries in the currency of country where company is incorporated in.

So for a US company you would pay your employees by bank transfer in defined amount of USD, pay the transfer fee on top of that. And employees would get money in their local currency based on the exchange rate.

Of course, ideally you would have all your remote employees open a bank account in your currency which would simplify everything.

> So for a US company you would pay your employees by bank transfer in defined amount of USD, pay the transfer fee on top of that. And employees would get money in their local currency based on the exchange rate.

For most banks / situation you actually get USD - the banks aren's allowed just do conversion by themselves (at least here in EU).

So you get a separate USD account balance which you then need to manually request to exchange - which is good because you can decided when to exchange it :)

Right that's probably better. I think you can do the currency conversion at the same time you send a payment but it's better to leave it on employees to choose when to convert currencies. They might better optimise exchange rates. They might even want to keep most of their money in USD if their local currency is not very stable.

> Another questions is how would you define salaries of your employees across various countries

Yes, good point. I'm incorporated in US and the remote workers are Contractors, not Employees (sorry, should've made that clear in my OP). I will be paying these contractors an agreed upon monthly or 1 time fees payable in USD.

Have you checked out Transferwise for payments? Highly recommend their Borderless account, currently using it to pay contractors from the US in AUD, EUR, and CAD, rates are very reasonable.

I second this. Currently using it (though not the borderless account, looks like that is new and need to check it out) to pay contractors in Canada and Australia.

That's how I pay my remote workers to.

TransferWise is awesome. It provides realtime market conversion rates. Charges very nominal fee. It has INR and EUR currency support (which OP needs for India and Spain). Money reaches destination within 2-3 days.

Or even less! Sent some money from Brazil to Sweden and in Brazil it's a convoluted process of paying invoices that need to be cleared by the banks, normally taking 1-2 working days. Even with that had my money from TW in 1 working day, pretty impressed.

Umm, as part of remote company mostly based in EU, most of the payments from US just came via standard bank transfer - even for coworkers in Ukraine. The costs were usually around 30$ - certanly not cheap but not that problematic in grand scheme of things.

Being paid via bank transfer is standard here (for employment it's actually enforced by law), if my employer in US would try to pay me via some strange intermediate or god-forbid BTC, I'd immediately think of a scam or attempt at tax evasion (with all the liability that comes with that).

Payoneer. He can open an virtual account there and get their mastercard for free which he can use whereever he needs. And you send money to that account easiliy. Most freelance sites use something like this to pay freelancers. Even Upwork that you used can send earnings to freelancers Payoneer account, so you could have just skipped giving money to Upwork and paid him directly

Payoneer works well but keep in mind that their ATM charges are really high.

Philippines - Remittance via local banks.

Remitely makes it easy, but the fees/exchange rate is high.

I also am debating about sending a prepaid debit card w/ PIN, because local ATM fees are only 50-100 peso for international transaction. Maximum 52php, but the full interchange rate is applied 49-52 PHP/1USD vs Remitely 47-48PHP.

At $500-700, that's $10 to send via the service + $10 in exchange fees.

I just paid 250 pesos at an ATM the other day, that's up from 200 pesos.

Take a look at coins.ph - the service has apparently built some connections with a lot of local money options. You can even put money back into it via 7/11 in the Philippines if you have no other banking options.

Try to avoid BDO/BPI, they raised the rates. Alternatively, if you have Charles Schwab/TDbank, they refund all ATM fees.

Good to know, it was a BPO ATM which I tried. I wonder why they raised the rates from 200 to 250? Currency fluctuations? That seems like a lot of money for something totally automated. That's probably one of the few services in this town which is making money. ;)

If this is long term, its better for remote workers to register as company (as sole proprietor). You can then pay them online. For e.g. - Indian guy can register as company and get a instapay account. Share a link and invoice with you and then you can pay.

This works as you will anyway need invoice for tracking expenses

What's wrong with bank transfers?

Very expensive

30 USD per transaction is expensive?

That's 10 days of labor in the country I'm living in. Even decently paid people here might need 3 days of work to make that. And yes, it seems like a lot for something which requires very little action from anyone.

But as a fee relative to the amounts I'd expect someone to pay a software developer... it shouldn't be too much.

Speaking to a potential employer, I would say that if 30 USD is expensive versus the salary you are paying, then you are paying too little.

As an example, my employer hires developers in the Philippines and pays on average 5000 USD each per month. The cost of the wire transfer is 0.6% of that. I think we pay more per month on phone service just to talk to them.

That is quite generous of your company to pay 5000 usd per month to devs in the Philippines. If you don't mind, can you let me know what company you work for? Since there is no contact info in your pofile, If you don't want to put it here, my email is in my profile. Thanks.

It's not generous. They aren't running a charity. There is a market rate for work and that rate isn't limited by geographic location. It's your ability to sell which will get you that rate.

As a developer, you have all the power to become a black hole of resources, sucking in all the money paid to you, the time of everyone who deals with you and all positive energy. That's why the start-up gurus will tell you that one bad hire can sink a company. On the other end, you have developers who can will into existence the sun, the moon and the stars. Location and nationality don't matter.

I think what people get caught up on is they think it's about developer skills. But paradoxically, when you are hiring a developer, it's those development skills which are the last things on the list of importance aside from the fact that they should be present.

https://80000hours.org/articles/skills-most-employable/

There was an HN thread on this article the other day. Agree with it or not, but I think all those things above programming is what separates a disaster looking to pick up a check from an A-team operator who doesn't have to worry about getting work.

>There is a market rate for work and that rate isn't limited by geographic location. It's your ability to sell which will get you that rate.

But for most programming jobs, developers are interchangeable and a big part of hiring a developer(remote or not) in developing countries is that you can pay a fraction of the salary you would be pay if you were hiring a dev in US/Europe. Hence this in essence is one of the major selling points.

What are the specific things would you say one can do to sell themselves at that rate keeping in mind the above mentioned point?

Keeping in mind the "most programming jobs developers are interchangeable" ? Either be very good at php/css, or be good at, something else. That is more rare. Say, low-level java/c++. And find a job at redislabs/scylladb/elasticsearch/etc.

No work is interchangeable. Some manufacturing jobs get close, but certainly not programming. I have heard this idea of programming jobs being interchangeable but I haven't seen it in the real world. This must be the work of a snake-oil salesman who was really good at being heard pushing this idea. Outsourcing and jobs sites like to push this idea because it makes them money. They can sell the idea, get the contracts and pay developers, but that doesn't mean any real work gets done.

If you want to know how to sell software (or services), I couldn't even touch the advice which tptacek and patio11 regularly give on HN. Do a search for their threads and run with their advice. As per patio11's profile, you could even email him and there is a 70% chance of him getting back to you.

I should probably update that downwards [0] these days -- I've even been thinking of dynamically calculating it to have an excuse to do a weekend programming project.

[0] Busy with work and kids leaves me with less time for the Internet generally, as you can probably gather by e.g. my HN participation being "a time or two weekly" rather than "multiple times every day for years."

I don't disagree. In your scenario, time becomes more of a concern than the money. After a certain point, you just want whatever is easiest for the people involved.

> But as a fee relative to the amounts I'd expect someone to pay a software developer... it shouldn't be too much.

That depends. I should've clarified that the remote workers are Contractors, not Employees, and the hiring period and costs vary. For example, I'd hired a contractor in India to write a small Python script -- took him 20 minutes - (1 time gig) for 50 USD. If I were to do a bank transfer for a 30$ fee, that's over 50% of the cost of the actual work / services rendered.

But I get your point. For remote employees on a USD salary, it's usually 2000 USD or more per month, and in that case, Bank Transfer may be feasible as it's convenient for both parties.

30 USD per transaction indeed seems expensive to me (but hey banks have to make money somehow and foreign bank transfers are one source of nice margins for them) but in a grand scheme of things this should be a negligible business expense to the company. I assume it would be a very small fraction of developer salaries.

If you're getting paid $500 for a small gig, then yes, it's a significant portion. It's a significant portion of $1000, IMO.

I've been using PayPal to pay contractors in the Philippines and US (I'm in Canada), and it's been pretty good. The fees are low compared to other options.

BTC/ETH/LTC

Thanks, but most remote workers I spoke with during the interview process don't trust cryptocurrency yet...

OrbitRemit works very well for us

Transferwise or Payoneer

xoom.com transfrwise payoneer

Moneygram?

BTC/ETH/LTC

Thanks, but most remote workers I spoke with during the interview process don't trust cryptocurrency yet...

My problem with them is simple: "how the hell do you turn them into actual money?"

I have/had 50€ worth of bitcoin and I tried to turn them into real money. Now I have ~50€ in some wallet on some service and I haven't been able to figure out how to get them out.

In most of the world cryptocurrencies are not practical in any way.

You have an account with an exchange. You click a few buttons and the money is in your bank account a few days later.

This is the user experience for an EU citizen. It's probably similar for people in the states.

Reply on news.ycombinator.com