Looking for Best Ways to Make Payments to Foreign Contractors? Read Here 2024

Claire Millard
Ileana Ionescu
Last updated
September 23, 2022

Hiring foreign contractors is more and more common, now that so many of us work online and remote working is so popular. Even if your business is still on the small side, using foreign talent can make great sense, to access the skills you need for one off projects or longer term collaboration. International contractors can also help your business grow, by connecting with customers and suppliers overseas, and helping to offer customer service across different time zones.

All that said, hiring foreign contractors also comes with some challenges. For one, you’ll need to work out how to manage payroll in a foreign currency with the lowest fees, and not too much admin to tackle.

This guide has you covered, with a look at some of the best ways to make payments to foreign contractors from Canada, including:

  1. Send money directly from your bank account

  2. Use a multi-currency account - try the foreign currency account from Wise

  3. Rely on PayPal

Key points

The good news is that there are a few different ways of paying foreign contractors from Canada. We’ll run through the pros and cons of each in a moment, first - a quick overview:

  • Pay with a business international wire - all Canada’s major banks offer this service, but it can be quite expensive and slow

  • Use a digital multi-currency account - online business a multi currency account can be used to run payroll internationally, as well as receiving, holding and exchanging a broad range of currencies

  • Stick with an online payment gateway - online services like PayPal are commonly used to send invoices and get paid - but international costs and currency exchange fees can make this pricey when sending money overseas

Foreign payments through a bank account

You can get a Canadian business bank account from one of our big banks which may even have no monthly fee to pay - or a low fee which covers some free transactions. However, the fee free transactions don't tend to include payments overseas - so even if you’re charged a monthly fee for your business bank account, you’ll probably face further costs to pay your foreign contractor with a bank wire.

And that’s not all. While what you pay in the end will depend on your bank and where you’re sending money to, international wires can include up to 3 different fees:

  • Upfront transfer fee

  • Exchange rate markup

  • Third party fees

The transfer fee is pretty easy to see in your account terms and conditions - here are a couple of examples from popular Canadian business bank accounts:

  • BMO eBusiness Plan outgoing wire payments: 0.2% of payment value, from 15 CAD to 120 CAD + 10 CAD wire charge

  • TD Bank Everyday A outgoing wire payments: 50 CAD

However, the exchange rate markup can be harder as it’s not usually declared by the bank explicitly. This is an extra charge which is added onto the exchange rate offered, which can be about 3%. It’s not a huge number, but it mounts up fast on higher value transfers.

And lastly there may be third party fees which come about when the payment is processed through SWIFT. In many cases these fees are deducted as the transfer is being passed through the SWIFT system, which means effectively your contractor will end up paying them.

One other thing it’s worth knowing if you’re planning to send international bank wires - the SWIFT network can be pretty slow. Payments may take 3 - 5 days to arrive which means you’d better plan ahead to meet your payment due dates.

Pros and cons of using a bank transfer for international payments


  • Familiar and safe service

  • Send online or in branches - although branch fees are usually higher

  • Payments available to a good range of countries


  • Fees can be high, and exchange rates usually include a markup

  • Slow delivery times

Multi-currency account 

Instead of using your normal business bank account for international payments, you might consider opening a specific multi-currency account from a low cost provider like Wise Business.

Multi-currency accounts are great for paying foreign contractors - but they’re also super useful for receiving payments from customers in foreign currencies, and paying suppliers around the world too.

Choose a specialist online service like the Wise Business and there are no monthly fees, and no minimum balance to worry about. You can hold and exchange 50+ currencies, and get bank details to get paid from 30+ countries like a local. And - importantly - you’ll be able to send money overseas to 80+ countries, making contractor payments easy.

Wise uses the mid-market exchange rate and low, transparent fees, which means this can be one of the cheapest options out there for paying foreign contractors from Canada.

Pros and cons of the Wise multi-currency account


  • Pay contractors in 80+ countries, often instantly

  • Hold and exchange 50+ currencies with the mid-market exchange rate

  • Accounts cost just 42 CAD to open, with no ongoing fees or minimum balance


  • No branch network

  • You can’t add funds in cash or cheque

Learn more

PayPal to pay foreign contractors abroad

PayPal is rightly popular as a convenient way to shop online and send payments conveniently and instantly. However, when it comes to international business payments, the costs can mount up.

There are lots of great things about sending money with PayPal, like instant delivery, and the fact you don’t even need your contractor’s bank account number to transfer. However, if you’re making a payment which requires currency conversion, you’ll pay a 4% conversion fee, on top of any other relevant fees, such as the 2% fee for international PayPal Payouts.

Of course you can also choose to just send your payment in Canadian dollars. In most cases, your contractor will be able to receive it into their PayPal account in CAD without issue. However, if they want to convert it to withdraw it to their normal bank account in their home country, they’ll pay whatever currency conversion fee applies to their account (3% to 4% is usual), plus any fee for withdrawal (which varies by country). This can mean they get far less than you were expecting in the end.

Find alternatives to PayPal

Pros and cons of using PayPal


  • Easy and convenient

  • PayPal has a huge user base, and it’s free and easy to open an account

  • Money arrives instantly in the recipient’s PayPal account


  • Exchange rates will include a currency conversion fee of 3% - 4%

  • There may be extra fees for the contractor to withdraw the funds at their end

What to consider before paying independent contractors

Bringing in foreign contractors for your business can come with huge benefits. But there are also a few important things to think about before you get started.

Firstly, you’ll need to be very sure if the person joining your team is a contractor or an employee in the eyes of the law. If you’re unsure, the Canada Revenue Agency can issue a ruling to confirm their employment status. This is important for determining both the contractor’s rights, and the tax implications for both of you. Bear in mind, also, that there may be extra things you need to do to comply with tax and employment law in the country your contractor is based in. Take professional advice if you’re unsure, as penalties may apply if you get this one wrong.

The second thing to think about is how you’re agreeing your payment arrangements on paper. Make sure you and the contractor have a full written contract before work begins, which covers the currency of payment, payment method, due dates and what happens if the work is delayed, or if there are issues like sickness or non-delivery. Having this all set out in advance means there’s far less room for misunderstandings down the line.

Finally, once you’ve got a contract hammered out, you need the right payment method that meets both your needs and the needs of your contractor. You’ll have agreed payment dates, so make sure whichever payment method you prefer can get your money moving fast enough - and don’t forget to research the overall costs of any payment method you’re considering, to make sure you’re getting a good deal.

Benefits of hiring international contractors

Hiring international contractors may sound like something only big corporate businesses would do - but smaller and newer businesses can benefit just as much. Here’s how:

  • Contractors are a flexible workforce you can bring in for short term needs or nurture for longer term projects

  • You’ll have a better chance of finding the right person and skillset by looking globally for your contractors

  • Having people supporting your business overseas can get you closer to customers and suppliers, and help you break into new markets

  • Foreign contractors can be very cost effective


Using foreign contractors can be the right move for many different types of business - from a startup looking to hire a web developer for a short project, to an established company that needs short term admin help. However, working out how to pay your foreign contractors is crucial. Get it wrong and you may find you’re hit by high fees and poor exchange rates, pushing up the costs of running international payroll.

Use this guide to the best ways to make payments to foreign contractors in Canada as a starting point to find the perfect set up for your specific situation.

Try Wise Business account


How do I pay someone from another country?

Business owners often pay overseas contractors through international bank transfers, multi-currency accounts and payment gateways like PayPal. Compare a few options to see which works best for you.

Can a Canadian company pay a foreign contractor?

Yes. However, there may be tax implications at home or in the contractor’s own country - take professional advice if you’re unsure.

Are overseas contractors tax exempt?

Generally contractors are responsible for most of their own tax matters, however as with anything to do with tax, it's complex, and penalties apply if you get it wrong. Get professional advice before you start employing overseas contractors to check how the law applies in your specific situation.

Can you hire someone from another country to work remotely?

Yes. Hiring remote workers overseas can be a really helpful way to add talent to your business and reach international markets.