TL;DR: Pay remote workers in LATAM via direct transfers, digital wallets, EOR platforms, or staffing agencies to keep payments fast, affordable, and by the book.
Summary
Latin America has an increasing number of skilled tech professionals and a similar time zone to North America. So, it is a great place to hire virtual staff. But figuring out how to pay remote workers in LATAM can be tricky. This article walks you through the different ways to send payments, from direct transfers to EOR platforms, and helps you choose the best method for your team and budget.
The number of remote workers in Latin America (LATAM) has grown rapidly in the past few years. According to a 2023 Nearshore Americas report, the percentage of remote staff jumped from just 3% in 2019 to 30% in 2023. In Brazil, a study by the Brazilian Institute of Geography and Statistics (IBGE) found that the share of employees working remotely rose from 3.8% pre-pandemic to 13.3% in 2020.
More recently, The Bogota Post revealed that Colombia saw a 55% increase in international remote hires in 2024 compared to the previous year. These numbers show that companies worldwide are hiring international talent to stay competitive.
With this growth, a new challenge has emerged: how to manage cross-border payments smoothly and compliantly. In fact, one of the most common questions about paying remote workers in LATAM is how to choose the right method — one that’s cost-effective, reliable, and legally sound.
The good news? We’ve got the answers. So, whether you’re hiring a freelance designer in Mexico or building a development team in Venezuela, this article will guide you through. Read on to learn the best way to pay remote workers in LATAM without risking compliance or damaging team trust.
Why Latin America Is a Popular Region for Remote Hiring
Seeing those numbers, you might wonder why more businesses hire remote teams from Latin America. Knowing the factors can help you decide if it’s the right move for your company.
1. Time Zone Compatibility
One major advantage of hiring remote workers in LATAM is that their time zone matches North America. Countries like Mexico, Colombia, and Peru share similar working hours with the United States and Canada. Because of this similarity, it’s easier for companies to talk to their offline staff, solve issues quickly, and keep projects running smoothly.
2. Skilled and Growing Tech Force
The past decade saw Latin America’s tech sector rapidly expand. According to the Center for Security and Emerging Technology, Brazil and Mexico have seen notable increases in STEM graduates in recent years. These two countries recorded a growth of approximately 26% and 30% between 2015 and 2020, respectively.
Argentina is also strengthening its tech ecosystem. Nucamp revealed that the country now has over 1,200 start-ups (a 25% increase since 2020) and generates nearly $10 billion in yearly revenue.
For employers like you, LATAM’s booming tech market means there are always skilled professionals who are ready to join your global team.
3. Competitive Cost Savings
Another reason companies hire remote workers in LATAM is to save on costs. A recent comparison from Hey Foster revealed that a mid-level software engineer in the U.S. typically earns between $120,000 and $150,000. A worker from Latin America, on the other hand, makes around $36,000 to $55,000. The result? Firms can save up to 68% on employment costs.
Because of this advantage, businesses can extend their budgets further or hire more team members. They can even use those savings for other important projects without losing quality.
What Are the Challenges of Paying Remote Workers in LATAM?
There are several considerations when choosing remote worker payment options in LATAM. Knowing these early on makes the process easier and less stressful for you and your team.
Hidden Currency Conversion Fees
When sending money internationally, the fees you see aren’t always the main cost. Hidden exchange markups often cost even more. These fees can take a big chunk out of what your team actually receives, especially if you’re not using the right tools to pay remote teams in Latin America. In some cases, businesses end up losing money without realizing it. This isn’t just a theory; it’s already happened to many firms.
For example, in 2023, U.S. small businesses lost nearly $800 million to opaque fees in overseas payments. Texas accounted for $167 million of those hidden costs, the highest among the states, as mentioned in an AXIOS Austin report. Choosing the right remote worker payment options can help you avoid these losses.
Local Banking Limitations
Not all Latin American countries have equal access to global payment platforms. For example, PayPal doesn’t offer direct withdrawals to Venezuelan bank accounts, and traditional options like debit cards linked to the platform aren’t available there. For freelancers, online sellers, and digital workers to access their money, they often rely on third-party services like AirTM to convert PayPal balances into usable currency.
Even in countries where PayPal is available, like the Dominican Republic, users often have problems. That includes limited local support, higher fees, and withdrawal delays, according to a OneSafe article.
Because of these regional differences, you should check which platforms your remote workers in LATAM can use before picking a payment method. The best way to pay remote workers in LATAM isn’t universal because it depends on each country’s banking system and access to global tools.
Tax Compliance Complexities
Another challenge is following local tax laws. Each country in LATAM has different requirements around contractor payments, income reporting, and employment classifications. A guide by Rise on LATAM contractor laws explains why proper work classification is important. Correctly classifying employees and contractors helps you avoid unexpected costs like social security payments, fines, benefits back pay, or legal issues.
Delayed Payments Can Hurt Morale
Lastly, payout delays are common with some international transfers. For instance, SWIFT bank wires can take up to 5 business days. Delays can stress out workers to manage expenses, and this may lead to dissatisfaction or even make them leave later on. Avoiding long wait times should be a priority when choosing how to pay remote workers in LATAM.
6 Common Payment Methods for Remote Workers in LATAM
Paying remote employees in LATAM isn’t the same for everyone. Here’s a quick look at the most common payment methods and how they work.
1. Direct Bank Transfers (SWIFT and Local Transfers)
International wire transfers (SWIFT) send payments directly from your business bank accounts to your workers’ local accounts. They’re secure and widely available but often come with high fees and slower processing times (3-5 days).
2. PayPal
PayPal is a popular platform because it’s easy to set up and available worldwide. Workers get paid instantly into their PayPal accounts, and they can either withdraw to their bank or spend straight from their PayPal balance. But it does come with high transaction and conversion fees. Additionally, remote workers in some LATAM countries face withdrawal limitations.
3. Payoneer
Payoneer lets businesses pay remote staff easily using its Global Payment Service. Employees can withdraw funds to their local bank account or use a Payoneer Mastercard to withdraw their money easily. Its conversion rates are commonly better than PayPal’s, but it charges annual card fees and isn’t available everywhere in LATAM.
4. Wise (TransferWise)
Wise sends money straight to your worker’s local bank account at real exchange rates and with low, clear fees. Recipients usually receive the payment within one business day. But there’s a limit to how much money you can send at once. Plus, both you and your recipient have to verify their identities.
5. Cryptocurrency Payments (Optional)
Some agencies pay remote workers using crypto like Bitcoin or USDT. This skips traditional banks and lets you send money directly from one wallet to another. It can also help you avoid exchange fees, but because crypto values change quickly, the amount of how much workers get can go up or down. Legal restrictions on crypto payments vary across LATAM, so you need to consult local regulations first.
6. Employer of Record (EOR) Platforms (e.g., Deel, Remote.com, Oyster)
EOR services hire and pay remote workers for you. They handle contracts, compliance, payroll, and benefits in their local country. They make international hiring simple, so you don’t have to set up a local entity or deal with complicated tax rules. Their fees are higher than direct payments, though, but they can help save significant time and reduce compliance risks.
Here’s a quick table to help you compare each payment method’s pros and cons:
Payment Methods
Pros
Cons
Direct Bank Transfers (SWIFT / Local)
Secured platform, widely supported, good for large payments
High fees, slower processing, complex paperwork for local accounts
PayPal
Fast transfers, a widely used platform, and user-friendly
High fees; limited withdrawal options in some countries; account holds for large sums
Payoneer
Competitive exchange rates, easy bank withdrawals, Mastercard option
Annual card fees; service availability varies by country; customer support delays
Wise (TransferWise)
Low fees, real exchange rates, fast transfers
Transfer limits, verification steps, not ideal for very large payroll batches
Cryptocurrency payments
Fast transfers; no bank intermediaries; worldwide access
Value volatility, tax complexity, and legal restrictions in some countries
Employer of Record (EOR) Platforms
Full compliance; easy onboarding; no local entity required
Higher service fees; less direct control over payroll; contract is with the EOR, not the worker
Not sure which method to go with? Or maybe you just don’t want to deal with the hassle of sending money across borders? When you hire through a web staffing agency like weKnow, they handle all payment logistics for you. No paperwork, no confusing currency conversions, or compliance worries — just simple, on-time payments so your team can stay focused on their job.
5 Factors to Consider When Choosing a Method to Pay Remote Workers in LATAM
Figuring out how to pay remote workers in Latin America isn’t just about what’s easiest for you. You’ll need to think about a few important factors before deciding on the right method.
Payment Speed
Quick payments go a long way in keeping your team motivated. Services like PayPal and Wise typically process payments within the same or the next business day. Traditional bank wires, though, can take a few days. So, your team will need to wait a bit before they receive it.
Total Cost and Hidden Fees
Some platforms add extra costs through poor exchange rates or withdrawal fees. For example, PayPal can charge up to 5% when you include currency conversion. Wise is more transparent because they use mid-market rates and show you exactly what you’re paying.
Legal and Tax Responsibilities
Each payment option has different tax requirements. If you’re paying remote employees in LATAM directly, you’ll likely need to handle international tax forms and stay updated on local laws. If you’d rather not deal with that, an Employer of Record (EOR) can make things simple for you. They will be the ones to manage taxes, legal compliance, and even benefits.
What Works Best for Your Team
Different team members have different needs. Some might prefer Wise or Payoneer because of their low fees and flexibility. Others might rely on local bank transfers to cover day-to-day expenses. It helps to check with your team early on so everyone’s on the same page.
How It Fits with Your Existing Systems
It’s also worth checking if the tools to pay remote teams in Latin America work smoothly with your current payroll or accounting tools. Wise and Payoneer offer reports you can export. They are easy to plug into your systems. EORs take it even further by managing payroll entirely, so you don’t have to.
Tax and Legal Tips When Paying Remote Workers in LATAM
When you hire virtual staff in Latin America, it’s important to know how they’re classified. If you treat someone like a contractor but the local laws consider them an employee, there may be extra tax and compliance requirements to take care of.
Take Colombia as an example: some developers working under long-term contracts have been reclassified as employees. That means companies are responsible for things like social security contributions and benefits. So, it would help if you learned the employment and tax rules in each country before you pay remote workers in LATAM.
As mentioned above, one way to make this easier is by using an Employer of Record (EOR) platform. They take care of figuring out worker status, handling taxes, and dealing with the needed paperwork for local rules. That way, you stay compliant, and your teams get paid properly and on time.
Tips for Smooth Payments and Strong Working Relationships
Handling team payments isn’t just about picking a platform and sending money. There are a few simple habits you need to apply to operate your business smoothly and build strong relationships with your staff that can last for a long time.
1. Set Clear Payment Terms
Before you start working together, you and your remote workers in LATAM should agree on when your team will get paid, how the money will be sent, and which platform you’ll use. It also helps if you decide on what currency you’ll use and who’s paying for the transfer fees.
This is especially important when paying remote employees in LATAM, who often rely on fast, predictable payments. If you’re clear from the start, your employees won’t be confused, and it will show that you’re organized.
2. Paying on Time
When you pay your team as scheduled, it shows you’re dependable. It will also create a more positive work environment and help your employees stay motivated. There’s a big chance they’ll continue working with you and keep doing their best when they know they’ll get paid on time.
3. Be Fair about Transfer Fees
There are usually extra fees when you send money across countries. If you cover those yourself, or at least split them with your team, it would mean you respect your team. It also makes sure your staff gets the full amount they’re expecting.
4. Save Your Payment Records
Make sure to keep track of all payments. It will make things way easier when it’s time for taxes, audits, or planning. Even if you’re using tools to pay remote teams in Latin America like PayPal and Wise, you might want to download the transaction reports and keep them in one place so you can find everything easily when you need it.
5. Keep Communication Open
If there’s a delay, a change in how you’re sending payments, or a new tax form they need to fill out, just let your team in LATAM know. Being open about everything shows you’re on top of things and helps you earn your workers’ trust.
Wrapping Up: Pay Remote Workers LATAM the Easy Way
Paying your remote employees in LATAM doesn’t have to be hard. You’ve got a few good options, like sending money through the bank or using PayPal. You also have the choice to go with an EOR platform that handles everything for you. The right method depends on the size and budget of your team and what rules you need to follow.
The goal is to pick a simple and affordable payment method and follow the rules. That way, your team can focus on doing great work without worrying about how or when they’ll get paid.