The best ways to pay contractors

There's no single "best" way to pay contractors. The right method depends on where your contractors are located, how much you're paying, how often you pay, and what proof you need. A $500 payment to a US contractor has different requirements than a $5,000 payment to someone in Argentina.

This guide compares the main payment methods—bank wires, Wise, PayPal, Payoneer, and cards—with real fees, speed, FX rates, and proof of payment. You'll learn when to use each method and how to choose based on your specific situation.

Payment methods compared

Here's how the main payment methods stack up for a $1,000 payment to an international contractor:

Key takeaway: Wise is cheapest for international payments. PayPal is fastest but most expensive. ACH is best for US contractors. Bank wires are expensive and slow—avoid them unless required.

When to use each method

Wise – Best for international contractors. Use when you're paying in a different currency, want low fees, and can wait 1-2 days. Supports 50+ currencies with real exchange rates. Ideal for regular payments to contractors in Europe, Latin America, Asia, or Africa.

PayPal – Best for small, urgent payments. Use when you need instant transfer, the contractor prefers PayPal, or the payment is small enough that 2.9% fees are acceptable. Good for US contractors or one-off payments under $500.

Payoneer – Best for batch payments to many contractors. Use when you're paying 10+ contractors at once and want to reduce per-payment fees. Payoneer offers mass payout features and is popular with freelancers globally.

Bank transfers (ACH/SEPA) – Best for large, local payments. Use ACH for US contractors (free or $1-3) or SEPA for EU contractors (free). Good for payments over $5,000 where percentage-based fees would be expensive.

Bank wires – Last resort only. Use only when the contractor can't accept other methods or you're required to use wires for compliance. Expensive ($25-50) and slow (2-5 days).

Proof of payment

Every payment needs proof. You need evidence that you sent the payment, the contractor received it, and what it was for. This is essential for audits, tax filing, and dispute resolution.

What counts as proof:

• Transaction receipt – From Wise, PayPal, Payoneer, or your bank showing date, amount, recipient, and reference number.
• Contractor confirmation – Email or message from contractor confirming they received payment.
• Invoice reference – Link between payment and specific invoice showing what the payment was for.
• Bank statement – Your bank statement showing the debit from your account.

Save all of these. If you're audited, you'll need to prove every payment was a legitimate business expense to a properly classified contractor. Missing proof can result in disallowed deductions.

Batch vs ad-hoc payments

How you pay depends on how many contractors you have and how often you pay them.

Ad-hoc payments – Pay contractors individually as invoices come in. Good for 1-10 contractors with irregular payment schedules. Use Wise or PayPal for individual payments. Simple but time-consuming if you have many contractors.

Batch payments – Collect invoices, approve them all at once, and send payments in a batch. Good for 10+ contractors with regular payment schedules (weekly, bi-weekly, monthly). Use Payoneer or Wise batch features to reduce per-payment fees and save time.

Example: You have 20 contractors. Instead of paying each one individually (20 separate transactions), you collect all invoices on the 1st and 15th of each month, approve them in bulk, and send batch payments through Payoneer. This reduces fees and saves hours of admin time.

Decision checklist

Use this checklist to choose the right payment method:

• Is the contractor in the US? → Use ACH (free) or PayPal (instant).
• Is the contractor international? → Use Wise (low fees, real FX).
• Is the payment urgent? → Use PayPal (instant) or Payoneer (same-day).
• Is the payment large ($5,000+)? → Use bank transfer (avoid percentage fees).
• Are you paying 10+ contractors? → Use Payoneer or Wise batch features.
• Do you need contractor confirmation? → Use contractor management software with built-in confirmations.

The bottom line

For most businesses, the best payment stack is: Wise for international contractors (low fees, real FX), ACH for US contractors (free), and PayPal for urgent or small payments (instant but expensive). Avoid bank wires unless required—they're slow and expensive.

If you're paying 10+ contractors regularly, use Payoneer or Wise batch features to reduce fees and save time. Always keep proof of payment: transaction receipts, contractor confirmations, and invoice references.

The right payment method saves you money and time. Choose based on contractor location, payment size, urgency, and volume. Don't default to expensive methods like bank wires or PayPal when cheaper options like Wise or ACH are available.