How to pay overseas contractors from Australia

Key takeaways

•  Choosing a money transfer service that provides clear visibility over fees, exchange rates, and potential surcharges helps you avoid unexpected costs and ensures your overseas contractors receive the correct payments.

• Establishing well-defined contracts that outline the terms of service, dispute resolution, intellectual property ownership, and applicable jurisdiction protects your business under Australian Tax Office and Fair Work legislation.

• Airwallex offers an all-in-one global platform to pay overseas contractors, with a multi-currency account and low-cost, fast FX that lets you payout to 200+ countries.

Having the right talent in place can be the difference between scaling and stagnation. But with persistent local talent shortages and annual wage growth running hot at 3.4%, many companies will enter 2026 worried they won’t find the skills they need to scale – or, if they do, they’ll lose the best candidates to those with the deepest pockets.

 In that case, hiring an overseas contractor to bolster your team and/or address a talent gap might be the best solution.

 But there are a number of factors to consider before you do – not least, how to stay on the right side of Australian Tax Office (ATO) and Fair Work Commission (FWC) rules, and how to pay contractors when they’re overseas.

 In this article, we’ll unravel some of that complexity so you can engage the talent you need to scale with confidence.

Who is an overseas ‘contractor’?

An overseas contractor is someone based in another country who provides services to your business, rather than being employed directly in Australia. The Australian Tax Office (ATO) defines a contractor as a sole trader, company, partnership, or trust that provides services while retaining rights an employee wouldn’t normally have.¹ 

For example, contractors typically have the freedom to choose how, where, and when they work. They’re generally paid a fixed fee upon achieving the result agreed in the contract and may delegate the work to others (and pay them accordingly). 

Contractors usually supply most, if not all, of the equipment required to perform the work and bear the associated risks, including liability for defective workmanship.

Six popular platforms for paying overseas contractors from Australia

The best ways to pay overseas contractors from Australia

Once you’ve confirmed contractor status, the next question is how to pay them. Cross-border payments typically involve different currencies, fees, and transfer methods. Luckily, there are a number of services and platforms you can use to simplify this.

Let’s look at the top ways Australian businesses pay their overseas contractors.

Airwallex

Airwallex is an all-in-one global financial platform built for fast, secure, transparent, and cost-effective international payments. It’s particularly suited for paying overseas suppliers in more than 200 countries, including contractors supplying business services.

You can pay overseas contractors directly from your multi-currency account using over 120 local payment rails, with 93% of transactions arriving the same day and 50% arriving instantly. Plus, you get to decide when to convert AUD to local currency so you can take advantage of the most favourable rates. This eliminates FX fees and minimises transaction charges, and lets you build up significant reserves that can be held indefinitely. 

 You can also set up a virtual local banking account in the contractor's country, with 21 countries currently available. The ability to set up local banking details is useful for certain local payments or compliance requirements.

 On top of that, Airwallex offers API integrations with back-office and accounting systems, so you can track payments, manage expenses, and simplify reporting.

Payoneer

Payoneer is a payment platform that helps businesses and freelancers get paid across borders. It’s used by millions of contractors in over 160 countries and integrates with popular freelance hiring platforms like Upwork and Fiverr.

You don’t need a Payoneer account to use the platform, but fees can stack up sharply for transactions outside its network, and the fee structure can feel opaque.

 Payoneer offers multi-currency accounts with local account details, allowing you to send and receive funds in a limited number of local currencies. You can’t control when AUD is converted to local currency, though, which can leave you vulnerable to market fluctuations.

 On the plus side, Payoneer’s Workforce Management tool provides global payroll, timesheets, and other services, while also helping businesses comply with local employment laws.

Wise

Wise is a fintech that specialises in multi-currency accounts and international transfers. It pioneered ‘see before you send,’ giving consumers clear insight into conversion rates and international transaction costs before approving them.

Simplicity and transparency are still core to Wise. It uses the mid-market rate for currency conversions (the midpoint between the buy and sell prices of any two currencies at any given time) but doesn’t add a markup. Instead, it charges a percentage of the total transaction. However, this can work out more expensive if you’re handling multiple regular payments to contractors.

Western Union

Western Union is one of the few ways to pay overseas contractors in cash from Australia, thanks to its global network of more than 550,000 pick-up locations.

You can also send and receive payments from bank accounts, debit or credit cards, and mobile wallets (in supported countries). Cash payouts can be available within minutes, while bank transfers typically take one to five days.

Fees vary depending on the transaction method and destination, and exchange rates (mid-market plus markup) are usually less competitive than those offered by online payment providers for smaller amounts.

OFX

OFX is a global payments platform that offers international payments, foreign exchange, and multi-currency accounts, designed especially for larger transactions.

Its free-to-use Limit Orders let you set a target exchange rate and get notified when the market hits it. OFX also offers Forward Contracts, allowing businesses to lock in favourable exchange rates up to 12 months in advance.

OFX uses a tiered exchange fee structure that sits above interbank rates, making budgeting less predictable.

International bank transfer

If you already have a business bank account with a major Australian high-street bank that supports international money transfers (also known as telegraphic, wire, or SWIFT transfers), this can be a convenient way to pay contractors. But it’s rarely the cheapest option.

The Australian Competition and Consumer Commission (ACCC)² has found that the big four banks are consistently more expensive than other providers. Transfers can also be slow, taking up to five business days.

In their favour, traditional banks have historically offered the widest global reach through their correspondent banking networks, although that’s not always the case today. Intermediary banks may also charge fees, even if your bank waives its own, and all banks generally apply a significant markup to the exchange rate.

HSBC stands out for its extensive global network, which allows it to offer more competitive pricing than some other Australian banks.

TorFX

TorFX is an international money transfer and currency exchange service that specialises in simplifying large and regular international payments.

It provides tools to manage currency risk, such as Spot, Forward, and Limit Order, and takes a higher exchange rate margin in lieu of a fixed fee.

But it only sends money via bank transfers, and so intermediary banks may levy additional charges. Transfers take up to two days to arrive, but may arrive the same day, depending on the currency and destination.

TorFX offers business solutions for recurring payments like contractor fees, streamlining the process and providing expert guidance for managing volatile markets across 35 currencies.

Revolut

Revolut is a neobank designed for international payments and known for its user-friendly app and low-cost, fast transfers, especially for smaller amounts.

But paying contractors from your Revolut Business Account can be limiting. SWIFT transfers can incur double-digit fees and take up to five days to arrive. Fees and allowances for free international transfers and interbank exchange rates vary by subscription plan (Basic, Grow, Scale, Enterprise). Instant, no-fee transfers are only available if your contractor also has a Revolut account.

As a business account customer, you can hold more than 25 currencies in multi-currency accounts, although usage limits apply to some plans.

A word on fees and what to look out for

International money transfer services make their margin in a number of ways, and at-a-glance comparisons are not always easy. 

In addition to comparing exchange rates, markups, and transaction fees, check whether you or your contractor will incur receiving fees (which may reduce the amount your contractor receives), international transfer account maintenance fees, and out-of-hours or weekend surcharges for making payments when the exchange isn’t open.

What are the legal considerations when hiring an overseas contractor?

With the growing trend of engaging overseas contractors, recent judgments³ suggest Australian regulators are taking a closer look at how these workers are classified. In some cases, the Fair Work Commission has found that overseas contractors can be treated as Australian employees and may be entitled to protections under the Fair Work Act 2009. 

It’s critically important to follow the Australian Tax Office (ATO) guidelines and seek advice when drafting contracts. Agreements should clearly outline the terms of the relationship, including how disputes are handled, which jurisdiction applies, and who owns any intellectual property created.

Businesses also need to understand their obligations around payments and record-keeping. Depending on circumstances, Australian laws may apply. The ATO provides guidance on declaring a worker as a contractor, reporting payments, and managing contractor fees and expenses for tax purposes.

How does superannuation work for overseas contractors?

If the worker is a contractor and not an employee, as defined by the ATO, and is not an Australian resident working overseas, you aren’t responsible for paying super contributions.

Why Airwallex is the best platform to manage a global team

For global teams, Airwallex is more than just an international money transfer service. It provides a range of tools to make managing remote workers, their expenses, and payments as simple and transparent as managing your on-site team.

Airwallex offers competitive foreign exchange with international transfers that save up to 80% on costs, broad global coverage, and access to 24/7 interbank rates. With a multi-currency Global  Account, you can receive foreign currency and pay suppliers from the same account, all while retaining full control over your FX exposure.

When you need local settlement, Airwallex lets you create foreign currency accounts in 21 countries, allowing payments over local rails and avoiding FX and transfer fees altogether. Multi-currency Corporate Cards, including virtual cards, can be issued instantly around the world, with full expense tracking and integration with your HR and accounting software.

Together, these features make Airwallex a complete financial management solution, giving you full visibility of your money anywhere in the world and making it easy for your team to focus on building your business.

Frequently asked questions

How do I make sure I legally pay contractors overseas from Australia?

This area of employment law has recently been the subject of rulings, so it’s best to seek expert advice. But you can start by checking the Australian Tax Office website for its definitions of a contractor and an employee, and the different obligations you have to each, including deductions.

I’ve hired a contractor who wants to be paid in their own currency via a popular local payment service that I’ve never heard of. What should I do?

Check out the Airwallex Global Currency Account, which allows you to pay via local payment rails in 120 countries. You can also set up Local Currency Accounts, which allow you to both receive and pay out in local currency using local rails, eliminating FX and international transfer fees altogether.

I’ve always used my bank app to arrange international payments. Why do I need another provider?

Your bank will likely charge a much higher exchange rate than you’d find elsewhere, and if it uses an intermediary bank, your payment could take up to five days to arrive and be subject to additional fees. If your business makes frequent overseas payments – to contractors, for example – or sells overseas, you can streamline your costs and enjoy same-day payments and receipts by using a provider like Airwallex.

Sources

1. https://smallbusiness.taxsuperandyou.gov.au/reporting-payments-made-to-contractors/who-is-a-contractor

2. https://www.accc.gov.au/consumers/specific-products-and-activities/foreign-currency-and-money-exchange

3. https://hrlegal.com.au/overseas-contractors-found-to-be-employees-australian-employers-risks/

4. https://www.ofx.com/en-au/faqs/are-there-any-transfer-fees/

5. https://www.revolut.com/en-AU/legal/standard-currency-transfer-fees-section/

6. https://www.revolut.com/business/currency-exchange/

7. https://help.revolut.com/help/wealth/exchanging-money/how-much-does-it-cost-to-make-an-exchange/will-i-be-charged-for-exchanging-foreign-currencies/

8. https://www.forbes.com/uk/advisor/money-transfer/torfx-review

9. https://wise.com/us/blog/torfx

10. https://arielle.com.au/paying-overseas-contractors-from-australia/ 

11. https://www.ofx.com/en-au/blog/how-to-pay-international-contractors/ 

12. https://wise.com/au/blog/paying-contractors-overseas 

13. https://onyx.legal/articles/how-to-avoid-your-overseas-outsourced-worker-being-covered-by-fair-work/

14. https://hammerjack.com.au/resources/workforce-trends-why-more-companies-are-turning-to-offshore-staffing

15. https://www.forbes.com/uk/advisor/money-transfer/wise-review/

The information in this article is based on our own online research. Airwallex was not able to manually test each tool or provider. The information is provided for educational purposes only and a reader should consider the specific requirements of their business when evaluating providers. This research is reviewed annually. If you would like to request an update, feel free to contact us at [[email protected]]. This information doesn’t take into account your objectives, financial situation, or needs. If you are a customer of Airwallex Pty Ltd (AFSL No. 487221) read the Product Disclosure Statement (PDS) for the Direct Services available here.