How to pay employees and contractors abroad

Building an international team does not have to complicate every monthly payment run. The main challenge is to separate two tasks: deciding how someone is legally engaged and paying the approved payroll or invoice amount.

Once the employment or contractor arrangement has been confirmed, the payment questions are more practical: what amount must arrive, in which currency, by what date and through which route? This guide focuses on that payment process and keeping control of fees, timing, currencies and approvals.

International employment linked to Swiss-based companies

International employment already represents a significant operational reality for Swiss-controlled groups. Swiss National Bank data provides useful context, although it covers employees of foreign subsidiaries rather than every remote worker or contractor.

Scope: Employees of foreign subsidiaries of Swiss-controlled companies. The figures do not cover every remote worker or independent contractor.

Source: Swiss National Bank, Direct Investment 2024.

How can paying employees abroad quickly become difficult?

As a company expands internationally, payroll payments can become harder to manage. Finance teams may need to handle several currencies, payment methods, bank accounts and monthly deadlines, often while coordinating with local entities, employers of record or independent contractors.

Delays, intermediary fees and unexpected currency conversions can also mean that employees receive less than expected or at an unpredictable time. At the same time, exchange-rate movements can make the total payroll cost harder to forecast in Swiss francs.

How can businesses make international employee payments simpler and more predictable?

1.   Separate employment setup from payment execution

Before choosing a payment process, confirm who is the legal employer or contracting party. This determines who calculates salaries, deductions, employer contributions, taxes and payslip requirements. The payment provider executes the approved payment; it does not decide what is due.

The Swiss SME portal underlines that remote work abroad can create obligations for the Swiss employer in another country. Local legal, tax and payroll advice should therefore come before the payment design.

2.   Build a payment map before the first pay run

A simple payment map gives the finance team the information it needs before any transfer is prepared. It also creates a repeatable reference for future pay runs.

3.   Pay in the local currency where possible

Paying a worker in CHF and leaving the recipient’s bank to convert the funds may make the final local-currency amount received uncertain. The bank may apply its own exchange rate and deduct charges before crediting the account. This can create avoidable issues for the employee or contractor, even when the Swiss company sent the correct CHF amount.

Paying in the local currency allows the finance team to review the exchange rate and payment cost before releasing the transaction. It also makes it easier to reconcile the amount sent with the amount stated on the payslip or invoice.

Local-currency payment may not automatically be the least expensive option. Compare the total CHF cost, the FX spread, the payment fee and any charges that may still be applied by the recipient’s bank. To achieve this, you could need access to a multi-currency account.

4.   Use local payment rails where they are available

An international transfer may pass through one or more correspondent banks before reaching the recipient. A local payment route uses the domestic payment system once the currency has been arranged. This can reduce reliance on intermediaries and make payment timing and charges easier to anticipate.

Local does not mean instant in every market. Bank cut-off times, local holidays, account validation and compliance reviews can still affect delivery. The route should be checked before the first payroll date, especially in a new or emerging market.

5.   Group recurring payments into one run

Five recurring payments may appear manageable when a team is small. Re-entering the same beneficiary information every month still takes time and creates opportunities for duplicate entries, incorrect amounts or missed deadlines. The workload also grows quickly when a company expands across countries or currencies.

With bulk payments, payment data can be prepared from an existing payroll or ERP workflow, uploaded, reviewed and released in one run. Each recipient still receives the specified amount and currency, while the finance team avoids preparing every transaction separately.

6.   Treat recurring payroll as a planned currency exposure

When salaries or contractor fees are fixed in a foreign currency but funded in CHF, the local-currency obligation may be stable while its CHF cost changes from month to month.

For example, a monthly payroll of INR 2,500,000 costs CHF 25,000 at an illustrative rate of INR 100 per CHF. If the franc later buys INR 95, the same payroll costs approximately CHF 26,316. The salaries have not changed, but the CHF cost is around CHF 1,316 higher.

A business can decide how much uncertainty it is prepared to accept. It may convert each month, hold balances in the required currency, or consider an appropriate FX risk-management approach for sufficiently certain future amounts and dates.

Depending on the currency, this may include a deliverable forward contract or a non-deliverable forward (NDF).

• A deliverable forward fixes the exchange rate for a future conversion and delivers the required currency.

• An NDF does not deliver the payroll currency. Instead, the difference between the agreed rate and the reference rate at maturity is settled in another currency, while the underlying salary payments must be arranged separately.

Example: a Swiss company paying five software engineers in India

Consider a hypothetical Swiss SME that is building a remote team of five software engineers in India. The company has already confirmed whether the workers will be engaged through an Indian entity or an EOR, or under contractor agreements. Its remaining challenge is to make the monthly payment process reliable.

For more context on the currency and payment environment, read our article on CHF/INR trade and the practical guide to emerging-market currencies.

What would your INR payroll cost in CHF today?

Use the CHF/INR calculator to estimate the Swiss-franc equivalent of an upcoming payroll amount.

Send

CHF

Receive

EUR

You could save up to*

EUR

*Currency rates used are indicative based on the mid-market rate with example spreads used to demonstrate the difference between an average for Swiss banks vs one typically offered by SwissFx.

This is for informational purposes only and you may get a different rate when exchanging money.

Please contact us for an exact price.

Send

CHF

Receive

EUR

You could save up to*

EUR

*Currency rates used are indicative based on the mid-market rate with example spreads used to demonstrate the difference between an average for Swiss banks vs one typically offered by SwissFx.

This is for informational purposes only and you may get a different rate when exchanging money.

Please contact us for an exact price.

Send

CHF

Receive

EUR

You could save up to*

EUR

*Currency rates used are indicative based on the mid-market rate with example spreads used to demonstrate the difference between an average for Swiss banks vs one typically offered by SwissFx.

This is for informational purposes only and you may get a different rate when exchanging money.

Please contact us for an exact price.

What should you check before the first international pay run?

How can SwissFx support international payroll and contractor payment flows?

SwissFx supports payment execution once the compliant payroll or invoice amount has been approved.

• Our multi-currency account provides access to more than 140 currencies from one account, with local payments and collections available in more than 30 currencies.

• Bulk payment tools can integrate with existing payroll and ERP workflows so multiple employees, contractors or partners can be paid in one run.

• Currency conversion and risk-management tools can be reviewed alongside recurring payment requirements.

• SwissFx has no subscription or setup fees. FX spreads are shown before a conversion is confirmed. Service availability depends on the currency, country, transaction and client eligibility.

Note that SwissFx does not calculate salaries, manage payroll deductions or act as an employer of record.

Important information

This article is for educational purposes only and does not constitute legal, tax, employment, payroll or financial advice. Requirements vary by country, worker status and contractual arrangement. Companies should obtain appropriate professional advice before employing or engaging people abroad.