For recruitment businesses managing offshore contractors and international contractor payments, the payment process can be considerably more complicated than a conventional UK assignment.

In the UK, a worker may simply be engaged through a PAYE umbrella company, with tax and National Insurance deducted at source before their net pay is transferred to a UK bank account.

Move into the offshore and international contractor market, however, and there can be considerably more to consider.

An increasingly international offshore workforce

Industries such as Oil & Gas, Marine, Subsea and Renewables have always relied heavily on skilled contractors who are prepared to work internationally.

As a result, it’s increasingly common for a contractor to live in one country, carry out an assignment in another and receive their earnings into a bank account somewhere else entirely.

The appropriate method of engagement can therefore be very different from a conventional UK PAYE umbrella arrangement.

Depending on what the assignment allows, engagement as a genuinely self-employed subcontractor may be appropriate. In some cases, contractors may also provide their services through their own limited company. Each arrangement brings its own considerations around contracts, documentation, employment status and compliance, all of which should ideally be considered before the assignment begins.

But once the correct engagement structure has been established, there is another important practical consideration: how is the contractor actually going to be paid?

The challenges of international contractor payments

International banking has become considerably easier with the dawn of digital banks but making payments to contractors around the world isn’t always as straightforward as it might appear.

Banks and payment providers can differ significantly in the countries, currencies and types of international payments they support.

Some payments may require additional banking information or intermediary banks. Certain countries can be more difficult to send funds to, while individual banks may have their own restrictions or requirements. A payment route that works perfectly well for one contractor may therefore not be suitable for another.

For a recruitment business, these complications can quickly become a problem. The contractor has completed their work and quite reasonably expects to receive their money on time, regardless of what may be happening behind the scenes with banks and payment providers.

This is why experience with international contractor payroll and payments can be particularly valuable when supplying an offshore workforce.

More than one way to make an international payment

When dealing with contractors across multiple countries, relying on a single bank or payment method can be restrictive.

Having access to alternative international payment routes means that when the obvious method isn’t available, there may still be another solution.

At Kanopi Contract Services, offshore and international contractor engagement has been a significant part of our business for many years. Alongside conventional PAYE umbrella employment, we specialise in offshore assignments and the engagement of self-employed subcontractors where appropriate.

That experience extends to the practicalities of getting those contractors paid.

We’ve made payments to contractors in more than 95 countries and, over the years, have encountered plenty of situations where an international payment hasn’t been quite as simple as entering account details and and pressing send.

In some cases, we’ve been able to find alternative payment routes where the most obvious option wasn’t available – including situations where others had previously struggled to get funds to the contractor.

Consider payment arrangements before the assignment starts

For recruitment businesses expanding into offshore or international markets, it’s worth considering contractor engagement and payment arrangements at the beginning of an assignment rather than discovering a problem when the contractor’s first payment becomes due.

Where will the contractor be working? Where are they resident? How should they be engaged? What currency will they be paid in? And, importantly, where is the contractor’s bank account?

Answering these questions early can help avoid unnecessary problems further down the line.

If you’re looking to place an offshore contractor somewhere a little out of the ordinary – or have an international contractor payment requirement that isn’t proving straightforward – speak to Kanopi Contract Services as there’s a good chance we’ve encountered something similar before!

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