We already talked about how to hire remotely and why it is so beneficial for your business, but many of our readers reached out to us with questions like how to pay remote employees?
We are happy to see many people asking about these details since those hiring remotely will benefit their business in so many different ways and it’s important to understand key information like how you will pay your new team member.
When it comes to sending funds to your remote employees or freelancers in Eastern Europe, or anywhere else in the world, you have multiple options.
The first thing to keep in mind is that your employee probably won’t be aware of the best solution even if he/she has past experience with receiving funds from multiple channels.
Figuring out the best way to pay your employees is important because if you make the wrong decision it can cost both you and the employee a significant amount.
So let’s dig in!
PayPal is one of the leaders in the payment processing industry and it’s available in more than 200 countries and in 25 different currencies.
Paying with PayPal is one of the simplest options for paying abroad, and one of the most used too.
As you may know already, there are several types of PayPal accounts available including both business and personal accounts.
For employers, we recommend getting a business account because it has more reporting options and it’s very easy and simple to use.
A good thing about PayPal it that it’s very easy and straight forward for sending funds. It takes seconds to do it, and the system will guide you step by step through the entire process. Your employees can even create a PayPal invoice and send to you each month.
However, the downside is that PayPal has a different agreement with the financial regulator in every country. For example, people in Bosnia and Herzegovina with PayPal accounts that have received under $10,000 will face significant delays to withdraw their money.
PayPal loves to keep everything neat and clean and that can be helpful, but your employee might get pretty frustrated since PayPal claims the right to hold the payment for up to 30 days. Not good when your employee needs to pay their own household bills!
This isn’t the case in all countries, and before you decide to go with PayPal make sure you do your research and see also what your employee knows about it.
If your employee is ok with that possible situation, then you are facing another downside of PayPal which are fees.
PayPal takes 4% as a transaction fee, and in some countries of Eastern Europe, it takes an additional fee ($5 or so) when the user is withdrawing money.
It’s important to come to an agreement with your employee who pays the transfer fees. If that’s you, and you choose PayPal you will need to calculate up from how much is the fee for the amount you’re sending.
That is because PayPal charges the person who is receiving money. So in this case, if you want your employee to get clean $800, you will need to send $833 to his account. When PayPal takes 4%, your employee will get around $800.
Now fees of $30 or so may not sound like much to you as a business owner, but to your remote employee that could be a days wages or more so it’s important to think about it from their perspective too.
Make sure your employee and you are both aware of these fees and make a clear agreement who’s paying the fees, and when the funds are being sent.
PayPal is definitely a secure option but probably not the best money-saving option for either you or your employee and definitely not the simplest option.
You’ve hopefully heard about Payoneer. They are founded in 2005 with the purpose of helping people with online payments within the USA and across the world.
It’s very popular among freelancers and remote workers because it transfers funds faster than PayPal.
Another awesome benefit of using Payoneer is that your employees can withdraw money from a local ATM. In this case, fees depend on their local financial regulator rules, and you should have nothing to do with that.
Once they register on Payoneer and get their first $30, Payoneer will charge them annual membership (which is $29.95) and send them their own MasterCard debit card.
Payoneer takes 3% transaction fee, and a user who receives money pays an additional 2% fee if he wants to withdraw funds to his local bank account.
Even though Payoneer has slightly better numbers than PayPal we still read many reviews from people in Eastern Europe that they some difficulties with accounts blocked after a few received payments, and they tried to resolve that with Payoneer, but it took a while.
The best way to avoid that is to fill in as much as information you can when it comes to sending funds via Payoneer. Your transaction is probably being monitored (safety comes first, right?), and you want to provide clear details on why are you sending that amount of money to a person in a different country.
These cases are not often, but you should be aware that it can happen.
When it all comes together, Payoneer is a popular, cool, secure and good way to send and receive money. But again, make sure you are well aware of all terms and conditions and your employee too.
If you are hiring remotely, freelance projects, part-time or full-time, you should definitely have the Payoneer account, because sooner or later, people you’re working with will request to be paid through Payoneer. If you don’t have Payoneer account, you can register here for free.
Bank transfers may sound like an instant headache but with the tips we’re giving you, you will be on the track to handle this type of payments without effort.
As technology is evolving every day, many people prefer online banking instead of going to the local bank to make the payment. No line, no waiting, no stress.
You see, local fee’s these days can go insanely high, up to 20% if you are sending internationally, and that’s something really worth avoiding.
In order to send your employee funds via wire transfer you will need:
- First and Last name
- Number of his local bank account
- SWIFT code
Fees will vary from the place you’re from, and you need to call your bank to check that out.
They will be less than going physically into the bank (if you send via your online bank account) but still, they do exist.
The best thing about these wire transfers is that your employee will almost certainly have a bank account and this gets money directly to them that they can then immediately spend.
Even though it’s also one of the most secure ways to transfer funds, it has multiple cons like:
- You need to be careful to ensure you enter the details 100% correctly. We recommend send a small trial payment first.
- Fees can be sky high, so don’t do anything before you consult with your bank
- It’s not as efficient as PayPal or Payoneer as you don’t have any visibility on the process or the timescales once it leaves your bank.
Our Recommendation and what we use here at JobRack to pay our team
One of the best money transfer systems out there is definitely TransferWise. Whether you want full bank accounts in multiple currencies, a multi-currency debit card or just a simple way to hold and send funds Transferwise has you covered.
TransferWise is known to be one of the best money transfer platforms out there because they have very low fees and are 100% transparent on both the fees and the time to send payments. You see the fees upfront when you setup the payment so you can choose to cover those as the employer then then employee receives local currency direct into their bank account with only their local banks currency conversion fees affecting them.
Since we also have employees in countries across Eastern Europe, we discovered that we can send them funds via TransferWise direct to their bank accounts. TransferWise charges less than 1% as a transaction fee and it’s quick and easy to do.
These are the lowest rates and the simplest most efficient process we found.
You can register on TransferWise for free and send funds directly. The best part about it is that our workers from Eastern Europe reported getting funds within just a few days into their bank account.
Paypal usually says 5-7 working days, and Payoneer says 3-5 working days for international bank payments.
If we come across a better option, we will update this post, but for now, this works for us best!
You can pay your remote employees and freelancers from Eastern Europe in various ways. The most important thing is that whatever you choose or try to test it out, make sure it’s secure and that your funds are in safe hands and that you talk to your employee about it in advance.
PayPal, Payoneer, TransferWise and online banking are the safest options, but you need to discuss this with your employee and agree on what works best for both of you.
Always make sure both sides are clear and in agreement on terms and conditions especially on fees, and that way you will avoid troubles and frustrations on both sides.
Do your own research for whatever option you choose, and let us know how you get on.
And if you still don’t have an extraordinary worker from Eastern Europe, then don’t miss out on incredible quality and efficiency our job seekers can provide!
Post your job ad now, and get a new rockstar in your team!