How to pay foreign contractors in Canada

July 28, 2021

Many independent contractors and 1099 employees are working remotely from Canada. Paying wages to overseas employees in Canada is an important task in their jobs. Paying independent contractors in Canada is mostly done by remittance services. However, paying independent contractors in cash in Canada also occurs to avoid payroll and the company’s taxes. Hiring independent contractors in Canada for working as an independent contractor in Canada for a US company is done by the Form 1099-MISC.

Working remotely from Canada for a US company tax is possible and many independent contractors and 1099 employees are working from Canada remotely. Payments to foreign contractors for services tax requirements are accomplished by the W-8BEN form. Independent contractor payroll for Canada regulations has also been introduced according to their local laws. The contractor upfront in Canada should be paid for a maximum of 33% or 50% of the total cost upfront. Independent contractor payment rights of the Canada 1099 employees and contractors are protected by the companies through which the contractors are linked.

An Independent contractor agreement is necessary to determine the independent contractor payment schedule in Canada. 1099 employees of Canada and contractors have to pay to the CRA 10.5% of their salaries up to a maximum of $5,796. 

Various methods are used to pay the independent contractor salaries in Canada. Payments to overseas contractors in Canada are sent through various remittance services. The currency of the country is the Canadian Dollar and the independent contractor pay, in general, is $25.91 per hour. The average salary of a Canadian worker is $61,912 per year. However, an average salary of a software developer is $75,106 per year in Canada. The exchange rate of 1 USD is 1.23 Canadian dollars.

Working remotely from Canada for a US company tax is possible and many independent contractors and 1099 employees are working from Canada remotely. The official languages of Canada are French and English which are the mother languages of most Canadians. The English language is used to communicate about the salaries to foreign employees in Canada

Many US companies are paying foreign employees through several remittance services. Using these remittance services is a legal method to send employee cash to Canada. However, Canadian contractor pays is also given in cash to avoid payroll taxes. Many methods are available that provide benefits of free transactions of contractor pays in Canada. Following are some best ways to get paid internationally in Canada:

  1. XE money transfer:

Freelancers can get paid internationally by XE money transfer that operates in over 200 countries. The company also provide instant delivery options to pay Canadian independent contractor salary. Contractor salaries are sent without a fee and exchange rates are available live on the website. They have relationships with financial crime enforcement networks through which they provide a high degree of security. The transaction can be made in 1-2 days. 

  1. Currencies Direct:

Currencies Direct is the best way to pay independent Canadian contractors because the payments to overseas contractors are sent without a fee. Furthermore, there is no account maintenance fee with live exchange rates available on the website. It is the fastest method to pay employees cash in Canada. Employee cash can be received at a minimum of one day and a maximum of 2-3 days. Strict transfer laws and rules are considered by the company along with the independent contractor payment rights in Canada. This helps in trustworthy money transfers in Canada. 

  1. OFX:

OFX helps to pay internationally without a fee. However, a mark-up is made on the exchange rates through which they earn money. The mark-up depends on the amount to transfer and the transfer history with OFX. For example, a 0.4-2.5% mark-up is added if transfer rates range from $8-$50. Service guarantees delivery in 1-2 days.
  1. Transwise:

Wise International Payment is the best way to send money to Canada because it supports 45+ state currencies. Fast transfers in up to 2 days of contractor pays can be done through the channel. However, the remittance cost is relatively higher i.e. $12.27 (48.5100 exchange rate). The service provides a high level of security and accepts credit and debit cards. The tool called Wise Batch Payment helps foreign countries to pay multiple salaries in the Philippines in one go. The company’s application has made International payments more convenient. However, the recipient can not track the transaction statuses.
  1. World Remit:

World Remit also provides a reliable service of paying wages to independent contractors in Canada. The transactions can be made through credit cards, debit cards, or mobile applications. It provides facilities for bank transfer, cash pickup, and airtime top-up. The transfer costs are very low at best exchange rates. The transfer fee is $3.99 which can increase to $24.99 for various currencies.

  1. Western Union:

Canadian contractor pays can also be sent through Western Union which is the best way to send money to Canada. Price Estimator Tool of Western Union helps to calculate remittance fees. Foreign contractor salaries can be received in minutes to days through Western Union. You can get paid through Western Union without a fee. The exchange rate is 47.7284. Agents are present all over the country that makes cash payments and pickups convenient.

  1. Xoom:

Salaries to foreign employees in Canada can be sent using Xoom. Xoom is a user-friendly service based in California for fast money transfers without a fee. The process of signing in and paying contractor salaries is convenient if compared to other remittance services. Xoom also provides free transfers over $1000 if banks are used as the sensing medium. Debit card and credit card payment rates are higher i.e. $30.49.

  1. Transfast:

Paying wages to overseas employees in Canada can also be done by Transfast. As the name indicates, Transfast offers faster transactions with competitive exchange rates. The transfer fee is impressively low along with a high degree of safety and security. It also offers a transfer of over $1000 without a fee if sent through a bank account. The application is available for both Android and IOS with good customer service. Cash pickups are also available throughout the country along with promotional packages to the new customers. Instant bank transfers however have higher rates. 

  1. Remitly:

You can get paid internationally in Canada by Remitly as well. Remitly is a cost-effective, and safe method of sending foreign independent contractor pay in Canada. Services of cash pickup, bank deposit, home delivery, and mobile money are also available. It also provides transfers over $1000 without a fee. Economy transfer service deposits contractor pays within 3-5 days. However, Express transfer supports instant delivery. The fee for transfers below $1000 is $3.99 and a 3% remittance fee is charged on card payments. The company also provides promotional packages for new customers.