The Best Way to Pay Contractors? Try Exploring G-P Meridian Contractor™

Hiring international contractors can provide several benefits for companies looking to expand their operations globally and enhance efficiency. Contractors offer specialized skills and expertise that companies can turn to for flexibility and scalability on short-term projects. However, paying independent contractors is more complex than it may seem, as it is significantly different from managing full-time employee payrolls.

Local labor law varies by country and the consequences of noncompliance, particularly for worker misclassification, can make working with contractors daunting for some companies. With G-P as your trusted partner, it’s easy — our global employment platform lets you compliantly hire and pay contractors so you can build a high-performing team that helps you meet your business goals. 

So let’s take a look at the challenges of paying contractors compliantly, best practices to consider, and how partnering with an Employer of Record (EOR) facilitates a seamless contractor experience from start to finish.  

What are the unique challenges of paying contractors?

Unlike full-time employees, contractors send you an invoice that must be reviewed and approved before you can make a payment. Processing this invoice requires time and careful management to prevent mistakes like underpayment or overpayment, payment for unapproved work, or even the misapplication of hourly rates, to name a few. And if you delay payment beyond the deadline you agreed upon with the contractor, your company can incur late fees or interest penalties. Check out our comparison table showing some of the differences between paying contractors and full-time employees.

G-P Meridian Contractor™ prevents common processing delays with its unified interface. You can easily make payments to contractors in over 180 countries and in over 50 currencies with a few clicks. Simply approve the invoice, select the currency, review the payment quote, and finalize the payment. 

What are some best practices for how to pay contractors?

Now let’s tackle the all-important task of paying your contractors. To build a good working relationship with your contractors, you need to set up clear agreements, establish set payment methods, and handle invoices properly. These basics will help make the whole payment process quicker, smoother, and more transparent.

• Contract establishment: Creating a thorough, detailed contract clarifies exactly when and how the contractor will get paid, guarantees everyone is on the same page, and provides legal protection for all parties.
• Pay rates: To manage finances effectively, you need to determine pay rates for your contractors that align with your budgeting requirements and cash flow.
• Payment methods: You can pay a contractor in several ways, including direct deposit, checks, wire transfers, or payroll software. G-P Meridian Contractor allows you to make instant payments in over 50 currencies via a digital wallet, ACH transfer, bank transfer, wire transfer, or credit card.
• Currency and exchange rates: When paying contractors, confirm their preferred currency and check the current exchange rates. You can use G-P Meridian Contractor for real-time guaranteed quotes at the time of payment to avoid exchange rate fluctuations. 
• Verification of bank accounts: Always double-check the contractor’s bank account details to confirm accuracy. This ensures they receive their payments quickly and without hassle or error.
• Accurate invoicing: Contractors can use G-P Meridian Contractor to create and send automated invoices for your approval. This helps with budgeting as you have access to clear records of expenses being accrued from your contractors.
• Real-time tracking: Real-time tracking speeds up your contractor payments based on their completed work, giving them a smoother cash flow. This benefits you indirectly by developing and maintaining a healthy working relationship with your contractor.
• Data privacy: To build trust with your contractors, protect their privacy by using secure payment methods and being transparent about your payment process. EORs that prioritize data security and privacy will have official accreditations that showcase your commitment to safeguarding information.
  
• Reporting and tax considerations: Classifying workers correctly is important to avoid fines and legal issues. On top of that, there are country-specific tax rules that must be followed. For example, while independent contractors handle their own tax obligations, in the U.S., if you pay an independent contractor USD 600 or more during a tax year, you must provide them with an IRS Form 1099 and follow IRS rules. 

Why work with an EOR to engage and pay contractors?

The easiest, most reliable way to pay your independent contractors is with a best-in-class EOR provider like G-P. While we’ve already touched on some of the features and benefits of G-P Meridian Contractor, let’s cover a few key takeaways.

• You can choose from G-P’s automatically generated, compliant contracts or easily edit and implement contracts of your own.
• You and your contractor can review, approve, and sign contracts digitally.
• Contractors can quickly send automated invoices and process payments through the platform.
• Built-in Wise technology enables flexible online payments in over 180 countries and in 50 currencies, making it ideal for companies managing a global workforce.

Getting started with G-P Meridian Contractor

Hiring exceptional talent, regardless of location or employment type, is the key to succeeding globally. Sometimes that means hiring contractors in addition to or instead of full-time employees. When that need arises, the best solutions are ones that mirror the flexibility and accessibility of contractors and allow talent and companies to work together. That is G-P Meridian Contractor™.

Contact us today or request a proposal to learn how to hire contractors compliantly.