How to pay a freelancer in India from abroad

You have found the right freelancer in India. The next question from your accounts person is usually "how do we pay them?" It is simpler than it sounds. This guide covers the common methods, the paperwork worth keeping and a payment schedule that protects both sides. It is general information, not tax or legal advice.

The common methods

• Bank transfer (SWIFT): you send money from your bank to their Indian account. Reliable and accepted by everyone. Banks at both ends may charge a fee, and the exchange rate is set by the bank.
• Wise and similar transfer services: usually cheaper than a bank, with the exchange rate shown up front. The money lands in the freelancer’s bank account in rupees.
• PayPal: quick and familiar, with buyer protection on eligible payments. Fees and currency conversion are higher, and many Indian freelancers add this to their price.
• Payoneer and freelancer payment services: popular with Indian professionals who work with many overseas clients, since they provide local receiving details and the bank paperwork automatically.

Ask the freelancer which they prefer. Most have a method that costs them least, and a small saving for them is often a small saving for you.

Which currency?

Quotes for overseas clients are usually in US dollars. Paying in the quoted currency avoids arguments about exchange rates. If you agree a rupee price instead, you carry the exchange rate movement.

Paperwork to keep

• An invoice for every payment, showing the freelancer’s name and address, your business name, a description of the work, the amount and the date.
• The written agreement or accepted quote, so the invoice ties back to an agreed scope.
• Any tax form your country asks for. In the United States, for example, businesses commonly ask a foreign contractor for a completed Form W-8BEN. Your accountant will know what applies to you.

On the freelancer’s side, Indian banks issue a document confirming money received from abroad, and exports of services are generally treated differently for GST from sales inside India. That is their responsibility, but an invoice with full details makes it easy for them.

A payment schedule that works

1. Deposit: 25% to 40% to start, so the freelancer is not working at their own risk.
2. Milestone: a second payment when something you can see is approved, such as the design.
3. Final payment: on delivery, after you have checked the work and received the files and logins.

Avoid paying everything up front, and avoid paying nothing until the end: the first leaves you exposed, the second leaves them exposed, and neither starts a good working relationship.

If something goes wrong

Raise it in writing first, with reference to the agreed scope. Most disputes are misunderstandings about what was included. If you paid by card or PayPal you may have a dispute process; with bank transfers you are relying on the agreement and the relationship, which is another reason to pay by milestone.

On VouchQuote, payment is agreed and made directly between you and the professional you hire. We do not hold money or add fees. See how it works.