Key Takeaways
- Paying remote employees isn’t just about transferring money. You must consider compliance, taxes, and local regulations.
- Options include SWIFT transfers, digital wallets, contractor invoices, payroll providers, or EORs.
- Misclassification of employees as contractors can lead to fines, back taxes, and legal issues.
- Local currency payouts and automated payroll improve trust and retention with global employees.
- Betternship combines compliant payroll (EOR) with access to pre-vetted African talent, helping you hire and pay remote teams faster and more securely.
Remote work has settled into a steady part of global business. Companies aren’t rushing into it like in 2020–2022, but many still maintain distributed teams for access to wider talent pools and cost efficiency.
That stability brings a practical challenge: how to pay remote employees in different countries while staying compliant with local laws, managing currency differences, and keeping workers satisfied.
This guide breaks down why paying global teams is more complex than paying local staff, and the main issues every business should factor in before choosing a payroll solution.
Why Paying Remote Employees Is More Complex Than You Think
Paying international staff isn’t just about transferring money. Here’s why it gets complicated:
- Currency and fees
Exchange rates fluctuate daily, and international bank fees can take a noticeable cut from salaries.
- Legal compliance
Countries require employers to deduct income tax, pensions, or health contributions. Paying someone “off the books” through PayPal or Wise may seem easy but often breaches local law.
- Classification risk
Mislabeling an employee as a contractor can trigger penalties, back taxes, and liability for benefits. Governments worldwide have increased scrutiny in 2025.
- Employee expectations
Workers want reliable payments in local currency, with benefits that align with local standards. Late or incomplete payments often cause dissatisfaction and turnover.
In short: paying remote employees means navigating finance, tax, and HR rules across borders. Without a clear system, costs rise and risks multiply.
Main Ways to Pay Remote Employees
When businesses search for “how to pay remote employees,” four options come up most often. Each has its strengths and limitations.
How do international bank transfers (SWIFT) work for paying remote employees?
Bank transfers remain one of the most common ways to pay global staff.
- Pros: Reliable, accepted almost everywhere, familiar to both employers and employees.
- Cons: Expensive transfer fees (often $20–$50 per payment), delays of several days, and poor exchange rates. Not ideal for recurring payroll.
Can you pay remote employees with PayPal, Wise, or Payoneer?
Yes, digital payment platforms are widely used for freelancers and remote staff.
- Pros: Faster than banks, lower fees, and many platforms allow payouts directly in local currency. Wise and Payoneer are especially popular for international transfers.
- Cons: These platforms don’t handle payroll compliance. If your remote worker is an employee (not a contractor), you’ll still need to manage taxes, benefits, and legal reporting separately.
Can remote employees be paid with cryptocurrency?
Some employers experiment with crypto payments for global teams.
- Pros: Fast, borderless, and often cheaper than traditional transfers. Useful in regions with limited banking access.
- Cons: Volatile exchange rates, unclear tax treatment in many countries, and limited acceptance for official payroll. Works better for contractors than for full employees.
What is the best way to pay remote employees compliantly?
For businesses hiring across multiple countries, global payroll providers or Employers of Record (EORs) are the most reliable option.
- Pros: They manage contracts, payroll, taxes, and benefits, while ensuring employees are paid in their local currency. This reduces legal risk and saves administrative time.
- Cons: Service fees apply, but for most companies, it’s still cheaper than setting up local entities or risking penalties for misclassification.
Compliance and Tax Considerations
Do I need to handle payroll taxes when paying remote employees?
Yes. If your team members are employees (not contractors), you’re expected to follow the tax and labor laws of their country. That often means:
- Kenya: Employers must deduct PAYE (Pay-As-You-Earn) tax and contribute to NSSF (National Social Security Fund) and NHIF (National Health Insurance Fund).
- Germany: Employers must pay into health insurance, pensions, unemployment insurance, and accident insurance on top of wages.
- Nigeria: Employers must withhold PAYE and contribute to pensions under PENCOM.
If you skip these obligations and a regulator finds out, you could face back payments and penalties, sometimes enough to wipe out your savings from “cheap” hiring.
What happens if I misclassify a remote employee as a contractor?
This is one of the biggest compliance traps in 2025. Governments are cracking down because misclassification costs them tax revenue.
Example: If you hire a “contractor” in Canada but expect them to work fixed hours, use your company email, and only work for you, Canada Revenue Agency may classify them as an employee. That means you’d owe back payroll taxes, benefits, and possibly fines.
It’s safer to either:
- Use a local payroll partner or Employer of Record (EOR).
- Hire truly independent contractors who manage their own schedules and multiple clients.
Best Practices for Paying Remote Employees
How do I build a compliant remote payroll system?
- Set a clear worker classification
Decide if the person is a contractor or an employee. Don’t blur the lines. For employees, set up compliant payroll (through an EOR or entity).
- Offer local currency payments
Paying in USD may sound simple, but in countries like Nigeria or Argentina, currency controls mean workers prefer (and sometimes require) local payouts. Using platforms like Wise or an EOR ensures conversion at fair rates.
- Automate recurring payroll
If you have more than three remote employees, manual transfers quickly become a nightmare. Use payroll platforms or an EOR that handles salary runs, deductions, and payslips.
- Budget for employer costs
Payroll costs aren’t just gross salary. For instance:
- In South Africa, employers contribute to UIF (Unemployment Insurance Fund).
- In the UK, employers pay National Insurance contributions.
Always calculate the “true cost” of each hire.
– Be transparent with employees
Tell them:
- When payday is.
- What deductions they’ll see.
- What benefits they’re entitled to.
Clear communication prevents mistrust, especially across borders.
How Betternship Helps Pay Remote Employees
Instead of juggling SWIFT transfers, contractor invoices, tax laws, and payroll platforms, Betternship gives you a single, streamlined solution.
Employer of Record (EOR) Support
We legally employ remote staff on your behalf in countries like Nigeria, Kenya, Ghana, and others. That means we handle:
- Payroll in local currency.
- Tax withholdings and government filings.
- Employment contracts that meet local laws.
Access to Vetted Talent
Beyond payroll, Betternship connects you directly with pre-vetted professionals in software development, design, marketing, and operations. This saves you the extra step of finding talent first.
One Transparent Invoice
Instead of sending multiple transfers, you pay Betternship once. We split it into salaries, taxes, and benefits on the backend, so your team gets paid correctly and on time.
Scalable Hiring Models
Whether you’re testing a market with one contractor or scaling to a full remote team, you can start small and expand without worrying about entity setup or legal exposure.
Time Zone Advantage
African professionals work in time zones that overlap with both Europe and North America, so you get smooth collaboration without scheduling headaches.
With Betternship, you don’t just “pay” remote employees, you build a compliant, scalable, and stress-free global team.
Are you ready to hire and pay remote employees the smart way?
Book a free call with Betternship and start building your global team without the payroll headaches.
Frequently Asked Questions on Paying Remote Employees
- What is the cheapest way to pay remote employees?
For freelancers or contractors, digital wallets like Wise or Payoneer are often the cheapest. For employees, the most cost-efficient and compliant option is using an Employer of Record (EOR).
- Can I pay remote employees in USD?
You can, but many countries require employees to be paid in local currency. In places like Nigeria and Argentina, local laws or banking restrictions may prevent direct USD payments.
- What happens if I classify a remote employee as a contractor?
If the person works like a full-time employee (fixed hours, reporting to you, single client), regulators may reclassify them. This can trigger back payroll taxes, benefits, and fines.
- How do taxes work when paying remote employees abroad?
Employers are generally responsible for withholding and remitting payroll taxes in the employee’s country. This is why EORs are popular; they ensure local compliance.
- How does Betternship make global payroll easier?
Betternship handles contracts, payroll, and compliance for employees across Africa, while also giving you access to vetted talent. You pay one invoice, we manage everything else.
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