How to Pay Your Filipino Contractor with These 4 Different Options
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It is advantageous for businesses to expand their operations into the Philippines for the following reasons: The Philippines is a great place to engage contractors because of its broad English-speaking workforce, which complements its rapidly expanding economy.
Are you prepared to search for talent with a flexible schedule in the Philippines? This guide will teach you everything you need to know to pay your Filipino contractors safely, in addition to teaching you how to hire and manage them.
There are four different ways to pay a Filipino contractor.
When it comes to paying Filipino contractors, businesses typically have the option of using one of the following four methods: an international money transfer, an online money transfer provider, an international money order, or a contractor payment platform. We discuss the benefits and drawbacks of each below.
International Bank Transfer
One of the most common forms of payment utilized by businesses when paying international contractors is a wire transfer conducted through a foreign banking institution. Bank transfers are a form of electronic money transfer that utilize the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network to move money from your bank account to the bank account of your contractor. Bank transfers are also known as wire transfers.
The completion of a SWIFT bank transfer can take as long as five business days, despite the fact that the transaction is safe and simple to carry out. Additionally, this method of payment comes with substantial fees for banking as well as exchange rates.
Online Money Transfer Provider
Companies can pay their contractors quickly and easily online using services such as PayPal, Venmo, and Wise, which are examples of online money transfer providers. They also typically offer lower fees compared to banks.
However, despite the fact that their fees might be lower in comparison to those of other payment options, online money transfer providers frequently tack on fees based on a percentage of the transaction and add markups to exchange rates. In addition to that, these services are not recognized in all nations.
International Money Order
Prepaid checks and international money orders are two additional methods that can be used to pay Filipino contractors. Employers have the option of purchasing a money order at a grocery store, post office, or bank and then sending it on to the contractor directly through the mail.
Unfortunately, payment deliveries can experience delays due to postal service issues. In addition, the location where the order can be cashed may not be convenient for the contractor. Markup fees are added on both the incoming and outgoing ends of the exchange for international money orders.
Contractor Payment Platform
A cloud-based payment solution that enables businesses to quickly pay contractors located in other countries is referred to as a contractor payment platform. This method of payment mechanically incorporates the fees associated with the foreign exchange into the payment, and it transfers funds to your contractors with only a few clicks of the mouse.
Some platforms for paying contractors even include extra features, such as locally compliant contract templates and safe storage for documents.
It is important to remember that a contractor payment platform is only responsible for handling pay and not classification compliance. If you want to avoid the fees and damage to your reputation that come along with misclassifying a contractor, you should probably think about using a contractor management solution instead.