Business International business

How to Pay Independent Contractors in India

Panna Kemenes

16.12.23 (updated more than 1 year ago)

Read time 3 minutes

Outsourcing became a trend for international businesses due to lowered cost and high returns. India remains one of the top providers of skilled and talented human resources.

Paying independent contractors in India is not always straightforward, however. This guide will cover payments options that can make it easier and more cost-effective to pay your contractors.

How to pay independent contractors in India: 5 ways to pay

While you might get lower labor cost through offshore outsourcing, paying contractors can be quite expensive if you don’t choose the right payment solution. You can save time and money by finding a money transfer service that supports business transfers to India.

Here are some of them:

1. Wise Business

Wise Business supports transfers to 40+ currencies including Indian Rupees. You can take advantage of fast transfers with the mid-market exchange rate and low transfer cost.


Fees	Conversion fee from 0.41%
Speed	0 - 2 working days
Convenience	Wise Business can be integrated to QuickBooks accounting software to help ease reconciliation.

Pros:

Mid-market Exchange rate
Low transfer cost
Recipients don’t need a Wise account to receive payments
Accepts Payments through debit and credit card, ACH direct debit and Wire transfer
Safe and regulated

Cons:

No cash pick-ups

The true cost of sending USD to GBP

2. Instarem

Instarem is also a low-cost way to send money to contractors in India especially for small amounts. Fees depend on whether your recipient receives in  USD or local currency.

Instarem charges a flat fee of $15 (or $20 for transactions of $5,000 or above) to send USD to USD abroad. When Instarem converts USD to local currencies, the fees vary from 0.3% to 1.0% based on the countries and corridors of transfers.¹


Fees¹	Transaction fees vary depending on: the country you’re sending from, the country you’re sending to, the amount you’re sending, the payment method. Exchange rates may include a currency conversion margin
Speed	1 - 5 working days
Convenience	Accessible on the app Supports Mass Payment

Pros:

Straight forward fee structure
Loyalty points that can be redeemed against transactions
Low exchange rate margin
Payments through ACH direct debit and wire transfer

Cons:

Account verification process can be lengthy
No card payment available

3. OFX

OFX doesn’t charge transfer fees. They make money by adding a mark-up on their exchange rate which can vary according to the transfer amount and your transaction history with them. It’s usually higher for smaller amounts and vice versa.


Fees	A small margin on your transfer above the current Market (Interbank) Rate²
Speed	1 - 5 working day
Convenience	Accessible on the app. Can be integrated to accounting software Can set up recurring payments BatchTransfer

Pros:

No transfer fees
No maximum transfer limit
Operates 24 hours a day, 7 days a week

Cons:

Exchange rate mark-up
Doesn’t offer same-day delivery
Minimum transfer is $2,000

4. PayPal

If transfer cost is your least priority, you might consider using PayPal to send money to India. PayPal is a well-known brand offering a fast and reliable service. Many freelancers and contractors are already using the service to receive payments from their clients.


Fees	Converting payments in another currency: 4.00%, or such other amount as may be disclosed to you during the transaction³
Speed	0 - 2 working days
Convenience	Accessible on the app Can send funds to recipients using their email address Mass payment tool for multiple transfers

Pros:

Fast and reliable
Secure

Cons:

High transfer fees and exchange rate mark-up
Recipient needs to have a PayPal account to receive the transfer

Pay vendors and bills with ease, and save money for your business
Join Wise Business today

5. Banks

Most banks in the U.S. offer international wire transfer services but they tend to be more expensive than online services that solely focus on money transfer. Most often, a wire transfer goes to your bank account to the recipient’s account, and it should be affiliated because it will be costly and may take longer days to process. Though, it's still an option especially in larger sums of money.


Fees	Average international wire transfer fee: $45
Speed	1 - 5 working days
Convenience	Can often be integrated to accounting software Can set up recurring payments

Pros:

Safe
Reliable

Cons:

High exchange rate mark-up
Expensive
Long processing time

Things to consider when paying independent contractors in India

Choosing the right partner for paying contractors in India can save you thousands of dollars in the long run. It’s best to do research first before making an international transfer to get the best price and service.

Here are some things to consider in selecting your money transfer partner:

Cost – transfer fees, processing charges and exchange rates; cost is an important factor to consider in making international transfer because every dollar counts, so choose a money transfer service that can provide the most reasonable cost.
Convenience – sending and receiving money with minimal difficulty is what people also consider in international transfers. Transferring money overseas can be complicated with the wrong provider. It’s worth finding financial institutions and online money intermediaries that make it possible to send and receive money in the most convenient way.
Speed and Reliability – most bank transfers take a few days to process your transfer. If you want to get both speed and reliability you must find money transfer partners that can give you both.
Security – banks offer high security features in money transfer, but of course it will come with a cost. Bank transfers can be secure for large amounts, but other options that offer bank-level security can lessen the hassle of the process.

Learn More:

Best Ways to Hire Employees in India

Sources:

Instarem website
OFX
PayPal price page

All sources checked December 19, 2023.

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.