Not professional advice. Rates, rules and prices change often. Figures here are researched estimates from the sources listed; anything marked “unverified” needs checking with the provider or a local adviser before you rely on it.
Paying a contractor in another country involves four separate choices: the payment rail, the fee model, the paperwork you collect, and the classification check that decides whether this should be a contractor at all. Get the last one wrong and the first three do not matter.
Step 0: Classify before you pay
Payment method does not change legal status. A person who works your hours, on your tools, mainly for you, can be re-characterised as an employee in many countries: Brazil (high), Colombia (high per Deel), Germany (strict), Mexico (significant), the Philippines (moderate to high). Run the audit in contractor misclassification risk by country first. If the person looks like an employee, the payment rail is not your problem; an EOR is.
The four rails
Rail
How it works
Who offers it
Fee pattern
Contractor platform
You contract and pay in one tool; it handles invoices and payouts
Deel, Remote, Oyster, RemoFirst, G-P, Playroll
Flat monthly seat per contractor
Contractor of record
Provider contracts the worker and takes on contract and compliance load
Deel, Remote
Higher flat seat
Payroll tool with international contractors
Adds foreign contractors to your domestic payroll account
Gusto (US-based)
Per-transaction wire fees
Direct bank wire / local rails
You send money yourself
Your bank
Bank fees plus FX margin
Public fees per contractor
Provider
Contractor price
Notes
RemoFirst
Free tier; Premium $25/month
Premium adds automated payments across 150+ countries
Remote
$29 basic; $99 Plus (up to $100,000 indemnity)
Contractor of Record from $325
Oyster
Free for 30 days, then $29
Contractors in 180+ countries (vendor claim); pays in USD, EUR, GBP or CAD; conversion fee if currency differs
Playroll
$35 (third-party snippet)
Not on a page we read
G-P
From $39, only when processing payments
130+ currencies; negotiable for 10+ contractors
Deel
$49
Contractor of Record $325
Gusto
Per transaction (snippet only)
$5 flat for a non-US contractor with a US bank account; international wires $15 minimum under $1,000, 1% to 1.5% above (not confirmed on the support page)
Worked cost example: 10 contractors, $3,000 a month each
Assume each contractor invoices $3,000 monthly. Annual fees only, excluding FX margin.
Option
Calculation
Annual fees
RemoFirst Premium
$25 x 10 x 12
$3,000
Remote basic
$29 x 10 x 12
$3,480
Oyster (after free month)
$29 x 10 x 12
$3,480
G-P
$39 x 10 x 12
$4,680
Deel
$49 x 10 x 12
$5,880
Gusto wire at 1%
$3,000 x 0.01 = $30 x 10 x 12
$3,600
Gusto wire at 1.5%
$3,000 x 0.015 = $45 x 10 x 12
$5,400
The range between RemoFirst and Deel is $5,880 - $3,000 = $2,880 a year on $360,000 of contractor spend, or 0.8%. The Gusto figures use the snippet's rate range and are unconfirmed. Scale matters: at $500 payments the wire fee flips toward the minimum ($15 per payment x 10 x 12 = $1,800), so flat seats lose to wires on small tickets and win on large ones. Break-even for a $29 seat versus a 1% wire: $29 / 0.01 = $2,900 per month. Below that, the wire is cheaper on fees (ignoring the $15 minimum); above it, the seat is cheaper.
The bigger cost is usually FX. Ask any provider whether it converts at mid-market or marks up. A 1% markup on $360,000 is $3,600, about the same as the whole platform bill. Oyster discloses a conversion fee when you pay in a currency other than the contract's (Oyster).
Compliance steps
Written contract. Scope, deliverables, fees, IP assignment, confidentiality, ending terms, governing law. Let the platform's template handle local specifics if you use one, but read it.
Tax form from the contractor. The IRS states that a foreign individual gives Form W-8BEN to the withholding agent or payer "when requested" (IRS). Secondary sources say entities use W-8BEN-E and that, absent a form, standard 30% withholding may apply (Tipalti). We did not verify the 30% on an IRS page.
Reporting. Secondary sources say no 1099-NEC is needed for services performed wholly outside the US, with Form 1042-S relevant if the work is done in the US. Verify with a US tax adviser.
Invoices. In Mexico, genuine independent contractors need their own invoices (CFDI) per our country file. In India, consultants commonly invoice under GST. Ask each contractor what local invoice they must issue.
Sanctions and ID checks. Platforms run identity checks; direct wires do not. Check that your bank allows the destination.
Permanent establishment and tax risk. Our India file warns that cross-border contractors directed from abroad can create permanent establishment or tax risks for the foreign company. Take advice for long-running or managed engagements.
Choosing a rail
Rules of thumb, not law:
Under 3 contractors, small payments, same currency corridor: a bank wire or Wise-style transfer is fine; keep your own contract and form collection.
3-10 contractors, recurring monthly payments: a contractor platform. At $25-$49 per seat the fee is small relative to payments above $1,000, and the contract and invoice trail is standardised.
Over 10 contractors: negotiate. G-P says pricing is negotiable for 10+ contractors, and volume deals appear elsewhere. Verify with provider.
Anyone who looks like an employee in a high-risk country: do not use a rail to paper over it. Use an EOR or Contractor of Record and read the indemnity terms. At $325 per month, a CoR is $3,900 a year versus $588 for a Deel contractor seat ($49 x 12), a gap of $3,312.
You already run Gusto for US payroll and have two or three foreign contractors: it can work. It is a US payroll product, not an international employer solution, and we did not find EOR or international employee payroll there.
Comparing platform terms
Ask for these in writing:
Payout methods and countries available, not just a country count.
Who is the contracting party (you, the platform, or a local entity)?
Whether the fee is charged monthly regardless of payment, or only in months with payments (G-P says only when processing payments).
Currency conversion method and markup.
Indemnity scope. Remote Plus states up to $100,000 and Contractor of Record "uncapped" on its pricing page; read the exclusions.
Exit: can you export contracts and payment history?
Bottom line
Choose the payment rail last. Classify first, then match the rail to volume: bank wires for one or two small payments, a flat-seat platform at $25-$49 per contractor for recurring payments, a Contractor of Record where you want contract risk shifted, and an EOR if the person is really an employee. In our 10-contractor example fees ran from $3,000 to $5,880 a year on $360,000 of spend, so FX markup and classification risk matter more than the seat price. Collect W-8BEN from foreign individual contractors; confirm entity forms and 1099 treatment with a US tax adviser. This is general information, not legal or tax advice; fees and rules change, so verify with provider.
FAQ
What is the cheapest way to pay a contractor abroad?
It depends on payment size. Flat monthly platform seats run $25 to $49 per contractor on public pages. A bank wire can cost less on a small payment and more on a large one: one snippet of Gusto's help pages cites a $15 minimum under $1,000 and 1% to 1.5% above, not confirmed on the page itself.
Do I need a W-8BEN from a foreign contractor?
Per the IRS, a foreign individual gives Form W-8BEN to the payer or withholding agent when requested. Entities use W-8BEN-E per secondary sources. Confirm your own obligations with a US tax adviser.
Do I issue a 1099 to a contractor outside the US?
Secondary sources say a 1099-NEC is not required for services performed entirely outside the US, with a Form 1042-S exception if work is done in the US. We did not confirm this on an IRS page; verify with a tax adviser.
Does paying someone as a contractor remove employment risk?
No. Misclassification risk depends on how the work is done, not how it is paid. See the country table in our misclassification guide.