How to pay and manage Argentine contractors: A practical guide
Complete guide to paying contractors in Argentina: Fees, CUIT/CUIL requirements, AFIP compliance, currency considerations (USD vs ARS), and contractor management tools.
If you're paying independent contractors in Argentina, you need to handle payment carefully and understand currency dynamics. The payment part is straightforward once you know the right method. The critical part—paying in USD, understanding currency controls, and managing extreme inflation—is where most foreign businesses make mistakes.
This guide walks through what you actually need to do. Then we'll show you where Kontrable helps organize the work.
The main things you need to do
1. Always pay in USD. This is non-negotiable in Argentina. Argentine contractors almost universally prefer USD because the Argentine peso (ARS) experiences high inflation (often 50-100%+ annually) and constant devaluation. Paying in ARS can result in significant value loss for the contractor. Use Wise for USD payments—it costs $4-10 per transfer with real mid-market exchange rates.
2. Use payment methods that allow USD holding. Wise and PayPal both allow contractors to receive and hold USD in their accounts, bypassing government currency restrictions (cepo cambiario). This is critical for contractors in Argentina.
3. Verify CUIT/CUIL before starting work. CUIT (for businesses and self-employed) or CUIL (for individuals) is Argentina's tax identification number. Always verify the contractor has a valid CUIT/CUIL before the first payment.
4. Use a written contract. Document the contractor relationship with a clear service agreement (contrato de prestación de servicios) covering scope, deliverables, payment terms, currency (USD), IP ownership, confidentiality, and explicit statement that they're an independent contractor.
5. Keep payment records. Maintain documentation of all payments made. As a foreign company, you typically don't withhold Argentine taxes, but you need records for your own country's tax compliance.
That's the foundation. Everything else builds on these five things.
Payment methods: What actually works
For paying Argentine contractors:
Use Wise. It's the cheapest, fastest, and most transparent way to pay contractors in Argentina.
Why Wise is best: It charges $4-10 per transfer with real mid-market exchange rates—no markup. PayPal charges $6-15 and has worse rates. Traditional bank transfers cost $20-50 and take 3-7 days. More importantly, both Wise and PayPal allow contractors to hold USD in their accounts, which is critical in Argentina due to government currency restrictions.
How to set up: Create a Wise business account (free). Get the contractor's Wise account or bank details. Send USD to their account. The contractor receives money in 1-3 business days and can hold it in USD, avoiding local currency risks.
What about PayPal?
PayPal is widely accepted in Argentina and offers instant transfers, but it charges $6-15 per transaction with worse exchange rates than Wise. For small one-time payments or if the contractor specifically prefers it, PayPal works. For regular payments, use Wise.
What about Payoneer?
Payoneer is popular with Argentine freelancers and charges $5-12 per transfer with 1-3 day delivery. It's useful if the contractor already has an account and prefers it. But Wise is still cheaper and faster.
What about cryptocurrency?
Some Argentine contractors prefer crypto (especially stablecoins like USDC) to avoid government currency restrictions. It works for tech-savvy contractors and offers minutes-to-hours settlement. However, Wise and PayPal are more mainstream and easier for most contractors. Only use crypto if the contractor specifically requests it.
What about traditional bank transfers?
Avoid them. They cost $20-50 per transaction and take 3-7 days. Use Wise or PayPal instead.
Currency: Always USD
Currency is the most critical consideration when paying Argentine contractors. Unlike other countries where contractors are flexible on currency, Argentine contractors almost universally prefer USD. This is non-negotiable in Argentina.
Why USD is critical: The Argentine peso (ARS) experiences significant inflation (often 50-100%+ annually), constant currency devaluation, and government restrictions on USD access (cepo cambiario). USD maintains purchasing power far better than ARS. A contractor paid in ARS loses real value every month due to inflation.
Always pay Argentine contractors in USD unless they specifically request ARS (which is rare and you should question). Paying in ARS is doing them a disservice—it means they lose value while you save on exchange rates. That's not fair.
Make sure you use payment methods (Wise or PayPal) that allow the contractor to hold USD in their account. This is critical because they can hold USD savings and avoid local currency risks.
Understanding CUIT/CUIL (Tax IDs)
Argentine contractors need either a CUIT or CUIL tax identification number. CUIT (Clave Única de Identificación Tributaria) is a tax ID for businesses and self-employed individuals. CUIL (Código Único de Identificación Laboral) is a labor ID for individuals. Both are valid for contractor work.
You need to verify the contractor has a valid CUIT/CUIL before starting work. This is the contractor's responsibility to obtain and maintain, but you should ask to see it as part of your contractor verification process.
Tax and compliance requirements
When hiring contractors in Argentina, tax obligations are straightforward: the contractor is responsible for their own taxes with AFIP (Administración Federal de Ingresos Públicos), Argentina's tax authority. You don't withhold taxes or file anything with Argentine tax authorities.
Your responsibilities: Verify the contractor has a valid CUIT/CUIL. Have a clear written service contract. Keep documentation of all payments. Don't withhold Argentine taxes. Always pay in USD.
Contractor's responsibilities: They must register with AFIP as either a monotributista (simplified system) or autónomo (standard). They're responsible for filing monthly and annual tax returns. They must issue facturas (invoices) for services.
Important note: As a foreign company paying an Argentine contractor, you typically don't have tax withholding obligations in Argentina. The contractor handles their own AFIP compliance. Consult with a tax professional in your country about reporting requirements in your jurisdiction.
Contractor vs employee classification
One mistake businesses make is treating contractors like employees. Argentina has labor laws that distinguish between the two, and misclassification can create legal risk.
A proper independent contractor relationship means they control how work is done, use their own tools and equipment, work for multiple clients, and are engaged on a project basis with defined deliverables. They shouldn't have set working hours, provided equipment, exclusive work requirements, or ongoing employment-like arrangements.
Document the relationship carefully with a written contract that explicitly states independent contractor status.
Common mistakes and how to avoid them
Mistake 1: Paying in ARS instead of USD. You try to save on exchange rates by paying in ARS. The contractor loses significant value due to inflation and devaluation. They become frustrated because their income loses purchasing power.
Solution: Always pay in USD unless the contractor specifically requests ARS (which is rare). If they ask for ARS, question why and explain the inflation risk.
Mistake 2: Not understanding currency controls. You send payment through a method that doesn't allow the contractor to hold USD. They receive the payment but can't access it due to government restrictions on USD withdrawal.
Solution: Use Wise or PayPal, which both allow contractors to receive and hold USD in their accounts, bypassing these restrictions. This is critical in Argentina.
Mistake 3: Using expensive bank transfers. Traditional international wire transfers cost $20-50 per transaction with poor exchange rates. Over a year, paying a single contractor, this costs thousands extra.
Solution: Use Wise ($4-10) or PayPal ($6-15). You save 60-80% on transfer fees.
Mistake 4: Ignoring economic volatility. Economic instability in Argentina can affect contractor availability, pricing, and reliability. You treat it like any other country and get frustrated when circumstances change.
Solution: Build strong relationships with Argentine contractors. Pay in USD consistently. Be understanding of the economic challenges they face. Many contractors are motivated and reliable despite economic pressure—USD income is highly valued.
Mistake 5: Using cryptocurrency without contractor preference. You decide to pay via crypto because "Argentina uses crypto." The contractor doesn't have crypto experience or infrastructure, and payment becomes complicated.
Solution: Only use crypto if the contractor specifically requests it. For most contractors, Wise or PayPal are simpler and more familiar. Ask the contractor's preference first.
Why hire Argentine contractors?
Despite economic challenges, Argentina offers significant advantages. The country has a highly skilled tech workforce with strong engineering and design talent. Rates are 40-60% lower than US-based contractors while maintaining quality. Time zone alignment with the US East Coast (ART is UTC-3) is excellent for collaboration. Cultural compatibility and similar work styles make collaboration smooth. Many tech workers speak English fluently. Most importantly, Argentine contractors are motivated—USD income is highly valued and makes a real difference in their lives.
Frequently asked questions
Q: Should I pay Argentine contractors in USD or ARS? A: Always USD unless the contractor specifically requests ARS (which is rare). ARS has high inflation and devaluation, so contractors strongly prefer USD. Paying in ARS means they lose value every month.
Q: What are currency controls and how do they affect payments? A: Argentina has restrictions on USD access (cepo cambiario). Government limits how much USD contractors can withdraw from bank accounts. Using Wise or PayPal allows contractors to receive and hold USD in their accounts, avoiding these restrictions.
Q: Do I need an EOR platform for Argentine contractors? A: No. EOR is for hiring employees internationally. Argentine contractors handle their own AFIP tax compliance. You just need a good payment method (Wise) and the ability to organize contracts and payment records.
Q: Is cryptocurrency a good payment option? A: Some Argentine contractors prefer crypto (especially stablecoins like USDC) to completely avoid government restrictions. However, Wise and PayPal are more mainstream and easier for most contractors. Only use crypto if the contractor specifically requests it.
Q: What's the best payment method for Argentina? A: Wise offers the lowest fees ($4-10) and best exchange rates. PayPal is also popular but has higher fees ($6-15). Both allow contractors to hold USD, which is critical in Argentina.
Q: Do I need a local presence or business registration in Argentina? A: No. You're paying independent contractors for services. You don't need an Argentine business entity, registration, or tax ID. The contractor handles their own compliance.
Getting started
If you're paying Argentine contractors, here's the process:
- Verify contractor has valid CUIT/CUIL
- Set up Wise business account
- Create written service agreement
- Ask contractor for Wise or PayPal account
- Always pay in USD (never ARS)
- Set up regular payment schedule
- Keep records for your tax purposes
- Maintain contractor contact and documentation
Kontrable helps with steps 2, 3, 5, 6, 7, and 8 by organizing contractor information, tracking payments in USD, managing contracts, and storing invoices. You stay in control of your payment method and use Wise directly.
If you're managing a few contractors, a spreadsheet works. If you're managing dozens or coordinating across a team, Kontrable saves time and keeps contractor data organized.
Ready to get organized?
[Start a free trial of Kontrable] – Get invoice workflows, payment tracking, and contract storage. Try it free.
