Hire from Pakistan
Paying contractors in Pakistan from the US: W-8BEN, payments and compliance
When a contractor is not a US person and works entirely outside the US, a US company generally does not issue a Form 1099 or withhold US tax; it keeps the contractor's completed Form W-8BEN on file instead. Payment usually goes by international bank transfer or a service such as Payoneer. If you need a full-time employee with local benefits, use an employer-of-record service. Confirm the details with a tax adviser.
W-8BEN instead of a 1099.
Ask a foreign contractor for a completed Form W-8BEN before the first payment. It documents that they are not a US person. You keep it on file rather than sending it to the IRS, and it supports why no 1099 was issued and no tax was withheld.
If the contractor does any of the work while physically in the US, different rules apply and payments may need to be reported on Form 1042-S.
How to send payments.
PayPal is not a practical way to pay contractors in Pakistan.
| Method | Good for | Watch for |
|---|---|---|
| International bank transfer | Larger, regular payments | Transfer and conversion fees; recipient bank requirements |
| Payoneer and similar services | Contractors already using them for client work | Account fees and exchange rates |
| Contractor-payment platforms | Teams with several international contractors | Platform fees; supported payout methods in Pakistan |
| Employer of record | Full-time employees | Monthly fee per employee |
What the contract should cover.
- Scope, deliverables, rate and invoicing schedule in USD.
- Intellectual-property assignment and confidentiality.
- Working-hours overlap and response expectations.
- Termination terms and a trial period, if you want one.
- Independent-contractor status: they control how and when the work is done.
Common questions
Do I issue a 1099 to a contractor in Pakistan?
Generally no, if they are not a US person and perform the services outside the US. Keep a signed Form W-8BEN on file instead. Rules change, so confirm with a tax adviser.
Can I pay a Pakistani contractor through PayPal?
Not practically: PayPal does not support receiving payments for personal accounts in Pakistan. Bank transfers and services such as Payoneer are the common routes.
When should I use an employer of record?
When you want someone as a full-time employee with local benefits and payroll, rather than as an independent contractor.
Your next step
Make the role worth matching.
Describe the work, confirm the requirements, and review the fit.