The Real Cost of Paying Contractors Wrong
Paying contractors seems simple — just send them money, right? But the compliance requirements are significant: you need to collect W-9 forms from US contractors, send 1099-NEC forms for anyone paid over $600/year, comply with international withholding requirements for foreign contractors, and maintain records proving the contractor relationship isn't actually employment.
The right tool handles all of this automatically. The wrong approach — sending PayPal payments with no documentation — leaves you exposed to IRS penalties, potential back-tax liability, and misclassification claims. We tested 6 tools on compliance completeness, payment speed, fees, and ease of use.
1. Gusto — Best for US Contractor 1099 Filing
Gusto
Payroll + Contractor PaymentsGusto handles 1099 contractor payments as part of its payroll platform. At $6/contractor/mo (with no monthly base fee for contractor-only accounts), you can pay US contractors via direct deposit, collect W-9 forms digitally, and receive auto-generated 1099-NEC forms at year-end. The Gusto contractor portal lets contractors update their own banking and tax information. For businesses paying multiple US contractors, Gusto's reliability and polish are hard to beat.
- Polished, trusted platform
- Digital W-9 collection
- Automatic 1099-NEC generation
- Contractor self-service portal
- No monthly base for contractor-only
- US contractors only (no international)
- $6/contractor/mo adds up at scale
| Plan | Price | Coverage |
|---|---|---|
| Contractor Only | $6/contractor/mo | US contractors |
| With Employees | $40+/mo base | Both employees and contractors |
2. Deel — Best for International Contractors
Deel
Global Contractor PaymentsDeel is the clear leader for international contractor payments. You can pay contractors in 150+ countries, in 120+ currencies, with compliance contracts generated automatically for each country's legal requirements. Contractors can withdraw via bank transfer, PayPal, Wise, Coinbase, or Deel card. The platform auto-collects appropriate tax documentation and handles local tax reporting where required. For businesses building global teams, Deel is the gold standard.
- 150+ country coverage
- 120+ currency support
- Compliance contracts per country
- Multiple withdrawal options for contractors
- Instant payments in some markets
- $49/contractor/mo is expensive for inactive contractors
- Complex pricing for add-ons
| Plan | Price | Coverage |
|---|---|---|
| Contractor | $49/contractor/mo | 150+ countries |
| Free Contractor | $0 (limited) | Basic payments |
3. Wise Business — Lowest Fees for Bank Transfers
Wise Business
International TransfersWise Business (formerly TransferWise) charges the lowest fees for international bank transfers — typically 0.5–1% vs 3–5% for PayPal or bank wires. If you need to send simple payments to international contractors without full compliance management, Wise is the cheapest way to do it. The Business account includes batch payments, API access, and multi-currency account features. However, Wise provides no W-9/1099 management, compliance contracts, or tax documentation — you'll need to handle those separately.
- Lowest international transfer fees (0.5–1%)
- Multi-currency accounts
- Batch payment support
- 70+ currencies
- Transparent fee calculator
- No compliance contracts or tax documentation
- Not a full contractor management platform
- Need separate W-9/1099 solution
| Plan | Price | Transfer Fee |
|---|---|---|
| Business Free | $0/mo | 0.5–1.5% per transfer |
5. Trolley — Best for High-Volume Contractor Payments
Trolley
Mass Contractor PaymentsTrolley (formerly Payment Rails) is built for businesses that pay large numbers of contractors regularly — content platforms, gig economy apps, affiliate programs. You can pay 1,000 contractors in a single batch. The platform handles recipient onboarding, international tax forms (1042-S for foreign nationals), and year-end 1099/1042-S filings. API access allows full automation. For high-volume use cases, Trolley's per-transfer pricing is cheaper than per-contractor monthly fees.
- Purpose-built for high-volume payouts
- API integration for automation
- 1042-S support for foreign nationals
- Batch payment processing
- Competitive per-transfer fees
- Overkill for businesses with fewer than 20 contractors
- Requires developer setup for API features
| Plan | Price | Best For |
|---|---|---|
| Starter | $0 setup + per-transfer | 50–500 contractors |
| Growth | Custom | 500+ contractors |
6. Remote — Best EOR + Contractor Combo
Remote Contractor Management
Global Contractor + EORRemote's Contractor Management plan at $29/contractor/mo offers a more affordable alternative to Deel for international contractor payments. Coverage spans 170+ countries, compliance contracts are generated automatically, and Remote handles local tax documentation. For businesses also using Remote for EOR (hiring full-time international employees), having both contractor and employee management in one platform simplifies operations significantly.
- $29/mo cheaper than Deel's $49/mo
- 170+ country coverage
- Combines with EOR in same platform
- Strong compliance contracts
- Fewer payment withdrawal options vs Deel
- Less polished UX than Deel
| Plan | Price | Countries |
|---|---|---|
| Contractor Management | $29/contractor/mo | 170+ |
| EOR | $599/employee/mo | 80+ |