According to iexpats.com, there were more than 5.5 million Brits working abroad in 2020. Even accounting for some post-Covid fluctuations, the numbers equate to 1 in 10 people who could be receiving a salary and compensation in a foreign currency.
If your business has employees working abroad then you’re likely to be paying them in a currency that is different to that of your home currency. To protect your bottom line and avoid escalating staffing costs, here’s how to get a competitive rate when sending wages overseas.
What do you need to consider if your employees work overseas?
Lower wages or income tax rates can make foreign labour markets appealing to UK businesses. To avoid any charges that could significantly impact profitability, it’s important to look at exchange rates and fees as well as costs like minimum wage when conducting a cost analysis.
What can initially look like a great-value source of workers can quickly become as expensive as the UK if you encounter high exchange rates or fees for converting your employees’ wages into their local currency. Taking into account other costs like flying out to train new employees and unfavourable FX rates can make international staffing costs prohibitive.
What is the best way to send money to overseas employees ?
There are many ways to send money abroad, including banks, money transfer firms and foreign exchange (FX) brokers. However a wide range of products, fees, and exchange rates can make it feel tricky to work out.
The best way to send money overseas depends on a number of factors including:
- How much you are sending
- How much it is going to cost
- How often you are sending it
- How the person wants to receive it
- How quickly the money needs to get there
Utilising a specialist foreign currency transfer company such as WordFirst can help you send money to employees based overseas. With same-day availability on 97% of currency pairs actively traded through our platform (cut off times apply), the World Account makes it easy to run a global payroll.
Pay like a local
- Pay suppliers, partners and staff in 40 currencies
- Send up to 200 payments in a single transaction to save time and money
- Open up to 10 local currency accounts, with local sort codes, account numbers and IBANs
- Lock in conversion rates to manage your currency risk
Securing a rate for the future
If you want to secure a rate but aren’t yet ready to make a transfer, you can choose a forward contract to fix a rate today for a specified date in the future. This can be especially useful if you have concerns about the exchange rate moving against you in the near future.
The great thing about a forward contract is that you know exactly how much you’ll get when you’re ready to transfer, and only need a deposit to hold this rate, freeing up your cash flow.
How WorldFirst can help
If you’re transferring money abroad for any reason, WorldFirst can help you choose the right type of transfer to suit your business needs.
If you trade on international marketplaces then our partnerships with companies such as Amazon and AliExpress make it easy to repatriate your income.
Forward contracts allow you to purchase your required currency for settlement in the future. If you’re thinking of purchasing commercial property overseas you could also consider a spot contract to facilitate the purchase for immediate settlement on the spot date. Currency transfers are priced using a fixed fee or a spread/margin.
Find out more about WorldFirst's products and services online.