Paying remote employees or contractors in another country is a different problem than a personal remittance: it is recurring, often larger in volume, needs to be defensible for accounting and compliance, and mistakes are more costly at scale. This guide covers the practical building blocks of international payroll — the common approaches companies use, what drives cost, and where our measured provider data is relevant to a payroll decision.
Companies typically pick one of three models: an Employer of Record (EOR) service that legally employs the worker on the company's behalf and handles local payroll, tax, and compliance in that country; a global payroll platform (Deel, Remote, Papaya Global, and similar) that automates multi-country payments and compliance without full EOR employment; or direct bank/provider transfers, where the company sends payment directly to a contractor or employee's account using a standard remittance provider. EOR and global payroll platforms typically charge a per-employee monthly fee plus payment processing costs; direct transfers avoid the platform fee but push all compliance and tax-withholding responsibility onto the company.
Beyond any platform fee, the underlying cross-border payment still carries the same two costs as any remittance: a transfer fee and an FX markup on the currency conversion. For a company paying dozens of contractors monthly in different currencies, the FX markup compounds significantly faster than for an individual sender — a 1.5% markup on $50,000/month in aggregate contractor payments is $750/month, or $9,000/year, purely from exchange rate spread.
This is why some payroll platforms now offer or partner with providers using near-mid-market FX rates (similar to what Wise offers for personal transfers) as a cost differentiator, since the FX line item is often larger than the platform's own subscription fee at scale.
Paying an international contractor directly (without an EOR) generally does not make the company responsible for local payroll tax withholding in the worker's country, since the contractor is responsible for their own tax filings — but misclassification (treating what is legally an employee as a contractor) is a real compliance risk many companies underestimate, and rules vary significantly by country. This guide is not legal or tax advice; consult an employment law or global payroll specialist for your specific structure.
For companies handling payments directly rather than through a full EOR platform, comparing measured, live rates across providers for the specific currency corridors involved can meaningfully reduce the FX cost component. The same fee and FX-markup dynamics that apply to personal remittances apply here — a provider with a strong headline rate on one corridor is not necessarily competitive on another, so checking corridor-specific rates before committing to a payment provider is worth the time at payroll volume.
Check live, measured provider rates for the specific currency pairs your international team is paid in.
An Employer of Record (EOR) legally employs the worker on your behalf in their country, handling local payroll tax and compliance directly. A global payroll platform typically automates multi-country payments and some compliance tasks without taking on legal employer status — it works alongside your existing entity structure or the worker's contractor status.
Costs vary by model: EOR services and global payroll platforms often charge a per-employee monthly fee (commonly in the range of tens to low hundreds of dollars per employee), plus the underlying cross-border payment cost (transfer fee and FX markup) on the actual money moved.
Yes, often more than for personal remittances because of volume. A 1-2% FX markup on tens of thousands of dollars in monthly contractor payments adds up to thousands of dollars a year — worth comparing measured rates across providers for the specific corridors involved.
Yes, many companies do, using a standard remittance or business payment provider. This avoids platform fees but shifts responsibility for correct worker classification and any local compliance considerations onto the company — consult a specialist for your specific situation.
Compare live rates across 370+ corridors on RemitRoutes · methodology.