HowUSBusinessesLegallyPayInternationalSoftwareContractors

For an international contractor, payment is generally straightforward: a bank transfer, a service like Wise or PayPal, or direct wire transfer against invoices tied to a signed contract. Unlike a US-based 1099 contractor, you typically won't issue a 1099-NEC to a foreign contractor for work performed outside the US — instead, documentation like a W-8BEN form is commonly collected to confirm the contractor's foreign status for your own records.

This is general information, not tax advice — your accountant should confirm the correct documentation and reporting for your specific business structure and how the contractor is set up on their end.

A solid contractor agreement covers scope of work, payment terms (fixed-price milestones or hourly with a defined billing cycle), IP ownership (specifying that work product transfers to you upon payment), and confidentiality. This should be signed before any substantive project discussion begins — it's standard practice, not a formality to skip for a smaller engagement.

For fixed-price work, a written scope tied to the price protects both sides — you know what you're paying for, and the contractor knows what's included versus what would require a change order.

Fixed-price engagements commonly start from USD 500 for smaller scoped work, often structured with milestone payments rather than a single lump sum. Hourly engagements run USD 25–45/hr with a 10-hour minimum, typically invoiced on a regular cycle. A written quote should be available within about 48 hours of a scoping conversation once requirements are clear.