Resource · Contractor Payments
How to Pay an International Contractor in Latin America
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 high fees ($25–$50 per transfer) 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.
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 take 3–5% in currency conversion spread, which adds up fast 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.
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.
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.
This page is general information, not tax or legal advice. Consult a qualified accountant or attorney for guidance specific to your situation.
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