How to pay contractors in Singapore
Singapore attracts talented individuals from around the world, but it also has its own local workforce, filled with people who are educated, skillful, and ready to take on projects from international clients on a contract basis. In fact, as of 2018, roughly 8-10% of the workforce in Singapore was made up of self-employed individuals and freelancers, and that number is expected to grow.
If you’re a business owner and you want to access some of the most knowledgeable workers who can help with everything from editing to web design, it’s worth looking into Singapore contractors. Before you do, though, consider the best methods for paying those workers once you hire them.
How to pay an international invoice
1. Negotiate currency exchange rates
Talk to your remote employees to find out if they would be willing to accept payment in your domestic currency. For example, if you’re a business in the United States and you need to pay a company in China, you may find that many businesses are happy to be paid in dollars.
2. Find a money transfer provider that works for you
Paying for an international invoice to a contractor in Singapore doesn’t have to be complicated or expensive. With the right provider, you can transfer your money easily online, and at a better rate. We’ll compare two popular options for making an international money transfer later in this article.
3. Mitigate your currency risk
Currency risk is the risk that a business or individual’s financial performance or position will be impacted by fluctuations in the exchange rate. Depending on the provider you choose, you can access tools to help mitigate risk like forward contracts to protect against any unfavourable currency movements. This will help with offering consistent pricing if you need to pay contractors in Singapore regularly.
How to transfer money to contractors in Singapore
Transferring money internationally can be costly to your business, unless you have the right strategy in mind. Here’s why using an online money transfer service is better than using a bank to send money abroad.
Transferring with a bank
After you’ve hired contractors from Singapore, and they’ve completed work projects for you, it’ll be time to pay them. Using your bank, though, might not be the best idea because every time you make a transfer, you’ll be hit with high margins and fees that can make hiring freelancers abroad more costly than it should be.
Transferring with an International Money Transfer (IMT) provider
Online money transfer services like OFX are often a smarter way to pay freelancers abroad in countries like Singapore. There are lower margins and fees compared to the banks will, and your money is often moved faster, with many of OFX’s transfers on the world’s major currencies arriving in 1-2 days*. Your freelancers will then be paid on time, you’ll be able to save money that you can reinvest in your business, and everyone will be much happier as a result.
|Fixed fees||Exchange rates margins||Support|
|OFX||Low to no fixed fees, depending on where you’re sending from.||A small margin that’s typically lower than the banks’ margins.||Available 24/7 over the phone to provide helpful human support for all currency-related enquiries.|
|Standard bank||Hefty fixed fees, sometimes around $30, just to make a transfer.||Many banks can charge up to a 5% margin on the interbank rate, depending on how much you’re transferring.||Banks operate within certain hours of the day, so you can’t always get the support you may need.|
What your business should look for in a global money transfer provider
There are many different money transfer services that you can find online, but they aren’t all created equal. Choosing the right one can make all the difference when it comes to saving money without sacrificing quality.
The sooner your contractors get paid, the happier they will be. With an online payments provider like OFX, transfers typically take anywhere from 1-5 days, depending on the currencies that are being converted and moved. Combine that speed with the security that comes with being a globally regulated company with sophisticated fraud detection technology, and you can rest assured that your money will be in your recipient’s account in no time.
OFX gives you access to helpful tools like currency charts on the Singapore dollar, and currency management products like forward contracts, and limit orders. All of these can make it easier to plan your international transfers in advance and empower you to make better decisions for your business, especially when fluctuating exchange rates can make it difficult to stay within budget when paying contractors in a foreign currency.
Stellar customer service is hard to come by these days, and it can be even harder to get help from an actual human! With OFX, you can rest assured that we’re here to provide human service 24/7 over the phone or via email. Need help in the middle of the night to make a quick transfer? No problem!
Legal and tax requirements for paying overseas contractors in Singapore
Provided that you’re hiring only independent contractors, and not employees, from Singapore, you may not be required to withhold or pay any taxes on your contractor’s behalf to the government of Singapore.
Instead, the contractor would need to pay taxes on their income based on local laws. And, for your own tax purposes, you would be required to keep track of any expenses involved in paying your international contractors.
Note: several factors will help determine if a worker is an independent contractor versus an employee. For example, if the contractor’s work doesn’t form an integral part of your business, if they own and use their own equipment, if they work with multiple clients, and if they choose their work hours, they’re more likely to be considered a contractor.
The best places to find contractors in Singapore
There are several helpful online platforms that make it easy to find highly talented contractors in Singapore. Here are a few examples to help you get started:
- Hubstaff Talent
Singapore: a resource for in-demand contractors
If you’re searching for skilled independent contractors who can help you take your business to the next level, it’s definitely wise to look in Singapore. There, you’ll find a workforce that’s educated and motivated. And, by using OFX to send your money abroad when you need to pay those contractors, you’ll be able to save money too.
*Delivery times are indicative and measured in business days from the time your funds are received by OFX.
IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited (trading as “OFX”) and its affiliates make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog.