How to pay global contractors without losing money to FX

Hiring contractors around the world is one of the most useful things a small team can do, but every cross-border payment quietly involves a currency conversion, and that is where money leaks. The contractor sees a different number from the one you sent, the rate moves between agreeing a fee and paying it, and over a year the gap adds up.

This guide covers the cleanest way to pay international contractors, when to pay in USD versus their local currency, how to keep an agreed fee constant when rates move, and how to read what you are actually being charged on a conversion.

Pay in USD or in the contractor's local currency?

The first decision on any contractor payment is which currency lands in their account. Both options are valid, but they move the currency conversion to different places.

• Pay in their local currency. The contractor receives exactly the amount they expect in the money they spend, with no conversion on their side. You carry the conversion, so you can see and control the rate at the point you pay.
• Pay in USD (or another shared currency). Simpler to standardise across a global base, but if the contractor's own account does not hold USD, their provider converts it on arrival, often at a rate neither of you chose.

As a rule of thumb, paying in the contractor's local currency keeps the conversion visible to the person who can actually shop around for a good rate, which is you.

FX markup versus the mid-market rate, in plain terms

The mid-market rate is the midpoint between what the market will buy and sell a currency for at a given moment. It is the rate you see on a search engine or a finance site, and it is the honest reference point for any conversion.

Almost no one converts at exactly the mid-market rate. The difference between the mid-market rate and the rate you are actually given is the FX markup, sometimes built into the rate rather than shown as a separate line. A clear provider lets you compare the rate you are offered against the mid-market rate so you can see the markup for what it is. When you assess pricing, look at the all-in cost of the conversion, not just any flat charge, because the markup in the rate is usually the larger number.

Keeping an agreed fee constant when rates move

You agree a contractor's monthly fee in one currency, but rates drift, so the amount leaving your account changes month to month. There are a few ways to keep things predictable:

• Agree the fee in the currency you will pay in. If the contract states the fee in their local currency, that is the amount they always receive, and the variation sits on your side where you can manage it.
• Hold the currency you pay in. If you keep a balance in their currency, you convert when the rate suits you rather than at the exact moment payroll is due, which smooths out timing swings.
• Decide upfront who carries FX movement. Write into the contract whether the figure is fixed in their currency or in yours, so there is no monthly debate when the rate has moved.

Hold and top up the right currency so you are not converting every time

If every contractor payment triggers a fresh conversion, you pay the markup every single time. Holding a working balance in the currencies your contractors are paid in changes that pattern.

With a multi-currency account you can keep balances in, say, USD, EUR and GBP, top them up when the rate looks reasonable, and pay out from the matching balance with no conversion at the moment of payment. You convert in larger, deliberate moves instead of dozens of small forced ones. This also makes budgeting calmer: you can see how much of each currency you hold and how many payment cycles it covers.

How Altery fits

Altery is a multi-currency business account built for teams that pay people in more than one country. You can hold several currencies, see the rate you are offered against the mid-market reference before you convert, and pay contractors in their own currency so the conversion stays on your side where you can manage it. Pricing on conversions is shown clearly so you can judge the all-in cost rather than guessing at it.

Frequently asked questions