Hiring Contractors

What’s the best way to pay independent contractors?

It’s time to answer: what’s the best way to pay contractors?
May 9, 2022
Oyster Team
A check being written

There’s no right or wrong way to pay independent contractors. As long as there’s a structure in place and both sides agree on the process, you can make it work. However, it’s best to compare the pros and cons of every option to reduce the risk of a costly and/or time-consuming error. 

With that in mind, it’s time to answer the all-important question: what’s the best way to pay contractors?

Here are four of the top methods:

  • Check: A business check is fast, simple, and affordable. However, a check can get delayed or lost in the mail. It’s not ideal when working with contractors abroad. 
  • Wire transfer: Domestic and international wire transfers are fast and convenient. Check into delivery speed and fees before choosing this payment method. Fees will vary based on where your contractor lives. 
  • Direct deposit: If you pay your independent contractors the same amount every month, you can use direct deposit to put the process on autopilot. 
  • Online payment system: An online payment app, such as PayPal, is linked to your bank account. This allows you to send immediate payments to contractors around the world. 

Not sure if you should bring on your next all-star as a contractor or employee? Wondering if you need to convert an existing contractor to full-time employment? Find out using our Contractor vs. Full-Time Analyzer.

Is it really that simple?

Yes and no. By comparing the finer details of these four payment methods, you’re likely to find that one (or more than one) makes more sense than the rest. But even so, you can’t head down a specific path until you answer these three questions. 

1. How can you pay contractors in other countries?

If you’re a U.S.-based company with U.S.-based contractors, all of the options above are at your disposal. But if you have contractors in other countries, there are additional questions to address. 

  • What payment options are available in the contractor’s home country?
  • How can you pay the person in their own currency?
  • Will the exchange rate cause you issues?

For example, it’s simple to pay U.S. contractors via check, but sending snail mail to another country is much more complicated (and expensive). 

2. How do you pay contractors compliantly?

This one is simple: you must take steps to remain legally compliant regardless of where the independent contractor is located. That means understanding regulations in your home country, as well as the countries in which your contractors live. 

3. Should you pay contractors online?

This is just one of many options available to you, but there are definite benefits of paying contractors online. These include:

  • Fast (often immediate) payments 
  • Efficient for both the company and contractor
  • Simple to manage payments

Final note: consider a mix of payment methods 

There’s no one-size-fits-all solution to paying independent contractors. For that reason, you may have to pay a contractor using more than one method of payment. 

An example would be making a prepayment via an online service and sending the remainder as a wire transfer upon completion. 

Pin down the payment rate and terms with your contractors upfront, so as to avoid gray area and complications in the future. 


The best way to pay independent contractors at your company may not be the same as at another company, and vice versa. Knowing the different ways you can pay contractors allows you to do your research, compare your options, and make an informed and mutually beneficial decision. 

As a multi-faceted HR platform, we enable you to find, hire, pay, manage, and develop top-tier contractors. It doesn’t matter if you’re paying contractors in your home country or abroad, Oyster can handle the complexities for you.

About the Author

Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce.

About the Author

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