Best Ways to Pay Your Employees

With emerging opportunities to hire remote workers, independent contractors, and freelancers you’re going to run into situations where you’re outsourcing work and need to pay your employees. So many companies are expanding and changing to only hire remote workers, getting rid of the office all together. And most of these remote workers are legally considered independent contractors. When you hire someone like this, you can’t treat them or pay them like a normal employee. You can’t tell them they have to work on a project or that they have to come to a meeting at a certain time. Independant contractors have to accept projects they want to work on and voluntarily come to meetings. You can ask, and they can voluntarily accept but there’s limitations involved. One of the other limitations is paying them. You legally cannot direct deposit money into an independant contractor’s account so this leads to a situation of how to pay your employees.

A photo by Alejandro Escamilla.

The tried and true method is sending out a company check to their mailing address. The pro is that all you spend is the price of a stamp, the con is it’s a hassle and it takes some time for your employees to get paid. Then there’s always the risk of lost mail. And if you’re like me who travels around a lot you may not always have a mailbox close by to mail things out or get your mail. It’s a simple option but it’s a little old school and can cause some problems.

Online Payment Services

I feel like every day there are new payment services popping up. Of course there’s always been Paypal. However Paypal takes money out of the in voice as a service fee. The fee for each transaction is 2.9% plus $0.30 USD of the amount you receive. It’s not a huge amount but to me it’s not quite worth it. However it is a simple option and if your employees don’t mind a little money taken out it can work out. Or if you don’t mind adding on that 2.9% to their invoice you could even it out for them.

Venmo is a new and emerging tool mostly used for personal use. But I’ve been using it for paying invoices and it’s actually so easy and useful. Normally you can see what your friends are paying for or getting paid for… but there’s an option to keep the payment private so nobody can view it. This keeps business transactions private. As long as you set it up through your business account and don’t use a credit card (there’s a 3% fee for credit cards) it’s so easy and you can pay someone on the go from your phone if you need to.


The easiest way to pay freelancers and manage everyone is probably through a service like Upwork. You can hire someone, track their hours, and pay them all through Upwork. If they download the desktop app, which you can request, it takes screenshots of their desktop when their timer is on. So you can ensure they’re not logging more time than they’re actually taking or sitting on Facebook all day. It’s also good for the freelancers, allowing them financial security as they can dispute payments if they are unfulfilled and things like that. You can also communicate and do video chats through Upwork if you’re interested in working within the platform. I use Upwork as my main example because I’ve used it the most but there’s others out there like Freelancer, PeoplePerHour, Guru, AngelList, etc.

The only issue I have with Upwork and other similar platforms like that is the amount of money they take out of your invoice. They recently changed their policy so for the first 100 hours you get 20% taken out, the next 500 hours you get 15% and so on. I assume it was created to ensure that freelancers aren’t starting contracts and leaving them shortly after, thus screwing over the business owners. But it’s no fun for the freelancers who are getting 6 bucks or more taken out per hour depending on their price!

Bill Pay Platform

If you have a lot of freelancers that you pay on the regular and want to be able to manage invoices easily for tax purposes and overall business management then a bill pay service (I’ve used is really easy for team invoice management. Make sure you’re setting it up correctly to pay contractors and freelancers and not employees.


Always check the rules on how you should deal with freelancers and independent contractors so you’re not doing anything illegal in your process. And don’t forget all freelancers have rights and nonpayment is theft!

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