Good morning! I have a question for you all. Do you cover the money transfer fees and conversion rates when paying a subcontractor? For instance, I just sent money overseas; it was $400, and the conversion rate and fees mean he gets $350. I sent what I owed, which was $400, but again, he got $350. If he were down the street, there would be no fees, and he would get his entire $400. If someone asked me to drive to them, they would be expected to pay for the gas, like these fees. He thinks he charged $400, so he should get $400. What do you think? I want to be fair. I would have to pay him $450 to get his $400, which seems wrong.
Almost all of my income stream comes through PayPal. PayPal takes a good chunk which is the cost of doing business. I wouldn’t think about charging my clients those fees; it isn’t their problem; it is mine. I could build that cost into their fees, but I don’t​
If you promised him $400, he thought he’d get $400, did his job but didn’t get $400 then yes, absolutely - it’s your responsibility to make sure he gets $400, not $350.
I hired someone to do a project for $400, and I expected to pay $400. What if he lived in a country with a worse exchange rate? How is that my problem? If I wire someone money, it costs me $25, which I deduct from what I owe them. If I FedEX a check, and they require their funds the next day, they’ll have to pay for that expedited delivery.
It seems that in this situation the person you dealt with didn’t factor in the exchange rate, so it’s their liability, however instictively unfair that sounds.
I know that if I buy something in a certain situation for dollars, then there will be possible import taxes etc. that raise that price.
Conversely, people that buy from the USA know that from the EU e.g. there is no VAT, which is balanced out by those import taxes.
So yeah, it can be a tricky thing but as long as both parties know the deal it shouldn’t be a problem.
Maybe pay him half the difference and both will have learned from the experience
Did you owe them $400 USD or something in their local currency? Exchange rates shouldn’t change what your contractor is expecting, so you should cover any transfer fees IMO. If it’s an expediting fee then they should probably cover it as there are a lot cheaper solutions than the $50 you stated (12.5%). I’m not sure about any international limitations but zelle is free, paypal is like 3%, and something like venmo let’s them decide how quick they get their money.
We have here similar system with my son. As an art student he helps me sometimes and uses the invoicing service called Ukko Light Entrepreneurship and Private Trader | UKKO.fi. They take care of taxes and other side costs. We agree the price together and he does the invoicing using the agreed pricing. I pay the invoice and he get’s his share, which is apparently less than than I’ve paid. I think this is similar case.
Right, but how much did you agree upon, $400 or €400? I think you should cover the paypal fee to get the money to him. Further if your negotiated fee was in Euros, you should cover any currency conversion fee so they end up with the stated amount. In my mind, it’s the cost of doing business with someone overseas.
I sent him an extra $50, which should bring him to his $400. The PayPal fee wasn’t a concern, and it was marginal. The conversion rate is what I was questioning - Conversion rate: 1 USD = 0.8890 EUR
It cost me $50 extra. That is like the shipping fee, which the buyer pays. I guess, in this case, I am the buyer.
