Resource · Contractor Payments

How to Pay an International Contractor in Latin America

By Diego Figueroa, Founder of UpHiire · Last updated: October 15, 2026

Getting the work right is half the job. Getting paid on time, without fees eating into it, is the other half.

Once you've hired a contractor in Latin America, the next question is almost always the same: how do I actually pay them? Unlike a US employee, there's no simple direct deposit through payroll. Here's what you need to know — payment methods, tax paperwork, and the mistakes that trip up most first-time clients.

Common ways to pay an international contractor

International bank wire

Works everywhere, but often comes with fixed fees on both the sending and receiving side, plus the exchange-rate markup, and poor exchange rates from traditional banks.

Wise (formerly TransferWise)

Popular for its transparent, low-cost currency conversion. Works well for recurring monthly payments.

Payoneer

Common among LATAM freelancers and contractors; supports multiple withdrawal methods on their end.

Deel / Remote / similar platforms

Specialized contractor payment platforms that also handle compliance paperwork, usually for a monthly fee.

PayPal

Widely available but often has the highest fees of the options above, especially on currency conversion.

How to pay contractors by country

Every country in Latin America has its own currency, banking rails and invoicing rules. Here is a quick reference for the countries where U.S. companies hire most often. Your contractor handles their own local taxes, but knowing how they get paid helps you choose the right method and avoid delays.

Contractor currencies, payment methods and tax paperwork by country
Country	Local currency	How contractors usually get paid	What to ask your contractor for
Mexico	Mexican peso (MXN)	Local transfer to their bank via SPEI (using their 18-digit CLABE), through Wise, Payoneer or a similar provider; some prefer a USD account	Their RFC (tax ID) and a CFDI electronic invoice
Colombia	Colombian peso (COP)	Transfer to a local bank account (the bank converts and reports the foreign-exchange operation) or a provider like Wise or Payoneer	Their RUT (tax registration) and an invoice or cuenta de cobro
Guatemala	Quetzal (GTQ)	Transfer to a local bank account in GTQ via Wise, or a wire to a USD account at a local bank (USD accounts are common)	Their NIT (tax ID) and an electronic invoice (FEL) issued through SAT
Honduras	Lempira (HNL)	Transfer to a local bank account in HNL via Wise, or a wire to a USD account at a local bank (USD accounts are common)	Their RTN (tax ID) and an invoice authorized by SAR
El Salvador	U.S. dollar (USD)	Wire or provider transfer in USD to a local bank account, with no currency conversion needed	Their NIT (tax ID) and an invoice; electronic invoicing (DTE) is being phased in through the Ministry of Finance
Costa Rica	Costa Rican colón (CRC), USD accounts are very common	Transfer to their local bank account (Costa Rica uses IBAN numbers) in CRC via Wise, or in USD to a USD account	Their tax registration with the Ministry of Finance (Hacienda) and an electronic invoice
Panama	U.S. dollar (USD)	Wire or provider transfer in USD to a local bank account, with no currency conversion needed	Their RUC (tax ID) and an invoice
Brazil	Brazilian real (BRL)	Local payout to their bank account via a provider like Wise or Payoneer (Pix is a domestic system, so U.S. companies usually reach it through a provider)	Their CNPJ if they operate as a company (PJ or MEI) and a nota fiscal for services exported abroad
Argentina	Argentine peso (ARS), contractors usually prefer USD	Wire to their USD account at a local Argentine bank. Since September 2025, freelancers can receive USD from abroad with no annual cap, but funds must enter a local account in foreign currency within 20 business days	Their CUIT and an export invoice (Factura E)
Peru	Sol (PEN)	Transfer to a local bank account via a provider like Wise, or a wire to a USD account at a local bank	Their RUC and an electronic recibo por honorarios
Chile	Chilean peso (CLP)	Transfer to a local bank account via a provider like Wise or Payoneer	An electronic boleta de honorarios issued through SII

Mexico

Local currency: Mexican peso (MXN)
How contractors usually get paid: Local transfer to their bank via SPEI (using their 18-digit CLABE), through Wise, Payoneer or a similar provider; some prefer a USD account
What to ask your contractor for: Their RFC (tax ID) and a CFDI electronic invoice

Colombia

Local currency: Colombian peso (COP)
How contractors usually get paid: Transfer to a local bank account (the bank converts and reports the foreign-exchange operation) or a provider like Wise or Payoneer
What to ask your contractor for: Their RUT (tax registration) and an invoice or cuenta de cobro

Guatemala

Local currency: Quetzal (GTQ)
How contractors usually get paid: Transfer to a local bank account in GTQ via Wise, or a wire to a USD account at a local bank (USD accounts are common)
What to ask your contractor for: Their NIT (tax ID) and an electronic invoice (FEL) issued through SAT

Honduras

Local currency: Lempira (HNL)
How contractors usually get paid: Transfer to a local bank account in HNL via Wise, or a wire to a USD account at a local bank (USD accounts are common)
What to ask your contractor for: Their RTN (tax ID) and an invoice authorized by SAR

El Salvador

Local currency: U.S. dollar (USD)
How contractors usually get paid: Wire or provider transfer in USD to a local bank account, with no currency conversion needed
What to ask your contractor for: Their NIT (tax ID) and an invoice; electronic invoicing (DTE) is being phased in through the Ministry of Finance

Costa Rica

Local currency: Costa Rican colón (CRC), USD accounts are very common
How contractors usually get paid: Transfer to their local bank account (Costa Rica uses IBAN numbers) in CRC via Wise, or in USD to a USD account
What to ask your contractor for: Their tax registration with the Ministry of Finance (Hacienda) and an electronic invoice

Panama

Local currency: U.S. dollar (USD)
How contractors usually get paid: Wire or provider transfer in USD to a local bank account, with no currency conversion needed
What to ask your contractor for: Their RUC (tax ID) and an invoice

Brazil

Local currency: Brazilian real (BRL)
How contractors usually get paid: Local payout to their bank account via a provider like Wise or Payoneer (Pix is a domestic system, so U.S. companies usually reach it through a provider)
What to ask your contractor for: Their CNPJ if they operate as a company (PJ or MEI) and a nota fiscal for services exported abroad

Argentina

Local currency: Argentine peso (ARS), contractors usually prefer USD
How contractors usually get paid: Wire to their USD account at a local Argentine bank. Since September 2025, freelancers can receive USD from abroad with no annual cap, but funds must enter a local account in foreign currency within 20 business days
What to ask your contractor for: Their CUIT and an export invoice (Factura E)

Peru

Local currency: Sol (PEN)
How contractors usually get paid: Transfer to a local bank account via a provider like Wise, or a wire to a USD account at a local bank
What to ask your contractor for: Their RUC and an electronic recibo por honorarios

Chile

Local currency: Chilean peso (CLP)
How contractors usually get paid: Transfer to a local bank account via a provider like Wise or Payoneer
What to ask your contractor for: An electronic boleta de honorarios issued through SII

Rules change. Confirm current requirements with your contractor and an accountant.

Paying contractors in Mexico

For local payments through SPEI, ask for the contractor's 18-digit CLABE so the provider can route funds to the right bank account. Most professionals can invoice with a CFDI. Agree in the contract whether you will pay in MXN or USD and who covers conversion costs.

Paying contractors in Colombia

Incoming payments for services go through a bank or authorized exchange provider, which converts the funds to COP. Contractors are registered in the RUT, so request their tax registration and confirm their bank details before the first payment.

Paying contractors in Guatemala

Many professionals hold USD accounts at local banks, which can make a dollar wire a practical option. Wise pays out in GTQ to local accounts, so confirm the receiving currency before sending. Contractors can issue an electronic invoice (FEL) with their NIT for your records.

Paying contractors in Central America

El Salvador and Panama use the U.S. dollar, so you can pay in USD with no currency conversion. In Honduras and Costa Rica, many professionals hold USD accounts at local banks, and providers like Wise can also pay out in local currency. In every country, ask for the contractor's tax ID and an invoice in the local format.

When planning your cost to hire in Latin America, account for transfer fees alongside salary, and confirm payment details during onboarding.

What tax paperwork do you need?

For a foreign contractor who isn't a US person, you typically collect a Form W-8BEN (individuals) instead of a W-9 — this certifies their foreign status for US tax purposes. Unlike a US-based 1099 contractor, you generally don't issue them a 1099 form, since they're not a US taxpayer. Tax treatment can vary based on the specifics of your arrangement, so it's worth a quick check with your accountant, especially for larger ongoing engagements.

Common mistakes companies make

Underestimating fees

Some payment methods quietly include a meaningful conversion spread that adds up on recurring payments.

Inconsistent payment timing

Contractors in Latin America often rely on payment landing on a predictable date; delays can hurt retention more than clients expect.

Wrong tax form

Collecting a W-9 instead of a W-8BEN, or skipping documentation entirely, which can create issues later.

Not confirming currency and amount upfront

Miscommunication about whether pay is in USD or local currency, and who absorbs conversion costs, is a common source of disputes.

A simple payment setup that works

Agree on currency (USD or local), payment date and who covers transfer fees, and put it in the contract.
Collect a W-8BEN and the contractor's local tax ID before the first payment.
Ask for an invoice every pay period in the format their country uses (see the table above).
Pay on a fixed schedule, biweekly or monthly.
Keep invoices and payment confirmations together for your records.

How UpHiire can help

For clients who'd rather not manage this directly, UpHiire offers optional ongoing payment support — you pay us on a recurring basis, and we handle paying your contractor directly. It's not a formal Employer of Record arrangement (see our contractor vs. employee guide for that distinction) — just a simpler way to keep payments consistent without managing the logistics yourself.

How to write a contractor agreement (free template) →

Explore finance and accounting talent →

Frequently asked questions

What form do I need from a LATAM contractor for tax purposes?

Generally a Form W-8BEN for individuals, which certifies their foreign status — not a W-9, since they're not a US taxpayer.

What's the cheapest way to pay a contractor in Latin America?

It depends on payment frequency and amount, but services like Wise typically offer lower fees and better exchange rates than traditional bank wires or PayPal for recurring payments.

Can UpHiire handle payments to my contractor for me?

Yes — we offer optional ongoing payment support where you pay us and we handle paying your contractor directly. Let us know if you're interested and we'll tailor a setup for your situation.

Do I need to withhold US taxes from a foreign contractor's pay?

Generally no, for a properly documented foreign contractor performing work outside the US — but this depends on your specific situation, so it's worth confirming with your accountant.

Can I pay a contractor in Latin America in U.S. dollars?

Usually yes. Many professionals in Latin America hold USD accounts or use providers like Wise or Payoneer to receive dollars. Agree on the currency in the contract so both sides know who absorbs conversion costs. In El Salvador and Panama, the U.S. dollar is the everyday currency.

Do I need a local entity to pay contractors in Latin America?

No. You can pay an independent contractor directly without setting up a company in their country. If you want them as a full employee with local benefits, you would need a local entity or an Employer of Record. See our contractor vs. employee guide.

Should I ask my contractor for an invoice?

Yes. Each country has its own format, such as a CFDI in Mexico, a FEL invoice in Guatemala or a nota fiscal in Brazil. A proper invoice protects both sides and keeps your records clean.

Who pays the transfer fees?

It depends on what you agree. A common approach is that the company covers the sending fee so the contractor receives the full agreed amount. Write it into the contract.

How often should I pay a contractor in Latin America?

Monthly or biweekly are the most common. What matters most is consistency. Late or irregular payments are one of the main reasons good contractors leave.

What's the best way to pay contractors in Mexico, Colombia or Guatemala?

For recurring payments, a provider like Wise or Payoneer that pays out to a local bank account is usually simpler and cheaper than an international wire. For Argentina, a wire to a local USD account is often preferred because of local currency rules.

This page is general information, not tax or legal advice. Consult a qualified accountant or attorney for guidance specific to your situation.

Sources

Want help managing contractor payments?

Tell us what you need and we'll walk you through your options.

Book a call Message us on WhatsApp