
How to Pay Remote Employees - bradleybuda
https://www.fredperrotta.com/pay-remote-employees/
======
Klathmon
I was really hoping this would go into some of the tax implications as well.

I was semi-recently denied a fully remote job because my state of residence
would have caused the company to have a "sufficient physical presence" in the
state, and meant that they would have to do a lot of extra work as well as
paying extra sales taxes for sales in that state as well as setup the
infrastructure to send the required taxes to that state.

It was enough of a hassle and cost that they decided to go with someone else
over me, because they were in a state that the company already had employees
in (at least that's what they told me...)

~~~
pc86
Why not mention the state?

You should contact your state representative (not member of Congress) and
state senator (not US Senator) and let them know that you were denied a well-
paying job because of the onerous standards your state has for remote work.
They might be inclined to change it.

~~~
Klathmon
I actually thought I did (it's Florida by the way)...

I want to be clear, that I don't blame the state in the slightest. I honestly
feel that companies should have to pay taxes where they operate regardless of
how many employees live there, but what sucks is that a lot of states have
difficult tax codes, esoteric and difficult ways of sending taxes in, have
varying laws that make it extremely hard to follow the law unless you are a
lawyer familiar with that area, and often won't help you if you need it.

I also don't really blame the company. I still feel like I would have been
more than worth the extra hassle, but they aren't sure. And if they can avoid
having to pay taxes in that state by not hiring me, and that can provide them
a material benefit, then I'd probably do the same as them if I were in their
position.

~~~
djschnei
Blame the state! A complicated, unwieldy tax code is their/our fault. They
created an untenable system that got in the way of you entering into a
mutually beneficial contract with another individual(s). It is 100% their
fault.

~~~
Klathmon
But it may not have been my state in particular, but the fact that they are
all different.

Even the easiest tax system in the world won't make up for the fact that they
need to record and charge for tax in that state, then send that money back to
the state.

Short of not having sales tax, there really isn't a way that they can simplify
it. And again, unless you are a lawyer that knows the tax laws in that area,
you won't know how good or bad the local tax system is until you go to try and
enter it.

~~~
T2_t2
Why not centralise it? Imagine a single account# that employees were paid to,
where everything was taken care of? Lets say one earns $120K, an employer pays
$10K a month to that number, and everything is taken care of, and the employee
is responsible for the outcomes, e.g. if you move, you are responsible for
changing your state of residence.

It is weird - and I say this as an Australian - that an employer can be on the
hook for employee's moving. it would be much easier if this was managed
centrally.

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FatalLogic
For over five years, I have been offering my remote employees the option of
payment, or partial payment, in bitcoin, or in more recent years in whatever
other cryptocurrencies they choose. For crypto salary payments, I added about
3%-10% to the amount paid, because processing it was much easier for me, no
hassles, no paperwork. It's a one click solution, like Jeff Bezos would say
^_-

I also prefer crypto payout methods for personal sentimental or ideological
reasons. Moreover, many of my foreign and US contractors had difficulties with
bank payments, severe local corruption, and bank account processing. These
problems are usually happening because they are from traditionally unbanked
social classes, they are not legally resident in their resident country, or
they are in developing nations where good quality banking services are not
aligned with their social class. But I would not deny that some could be
attempting to avoid paying taxes or other such traditional obligations.

More than half of the international contractors tried cryptocurrency options.
Many of them cashed out pretty instantly and I've heard they had no big
problems doing it. Several kept their cryptos for years and they have made
ridiculous profits now, even enough to retire. But I've also heard that a few
timed the markets unfortunately or made bad side investments and lost a lot of
the money they earned.

~~~
viraptor
> because processing it was much easier for me, no hassles, no paperwork

Are you saying the payment was completely off the books? That doesn't seem to
match "employees"...

~~~
FatalLogic
I don't know how you would define employees, contractors etc. But the hard
details of the deal have always been strictly an amount of payment for work
completed. No more and no less than that. No written contracts, no sick leave,
no government insurance, no paid holiday. All those expenses are their
responsibility, and they know that.

But the real situation is a little softer, because of course I will be more
flexible if a contractor seems to be good and of course they will be more
flexible if I have been playing reasonably and fairly with them. Decent people
feel happier behaving this way, and wouldn't we all be damn stupid if we
didn't behave like decent humans? I try my best to avoid doing business with
stupid people.

~~~
viraptor
What I was going for was: if it's a standard contractor-like payment, what
paperwork do you save by using cryptocurrency?

~~~
FatalLogic
There's no paperwork. None. I'm working as an offshore company domiciled in a
"tax haven"....

So that paperwork is one of the hassles that we save. Sending payment is one-
click. Then it's done and there's no possible undoing.

Bank payments can be denied, reversed, routed strangely, delayed or something
else. Bitcoin is more binary; either it works instantly or it fails and you
know it. There's not so much doubt about it. Though high transaction fees for
a few weeks last year did introduce more uncertainty, that is true.

Anecdote: Out of hundreds of small monthly salary payments I've sent out, I've
only once had a big problem. What happened there was that the payee said she
hadn't got it, but the blockchain said it was sent and confirmed.

Of course I certainly trust the blockchain to tell me the truth. More than I
trust a bank. Who wouldn't?

I think the payee's computer had probably been malware hacked. (So I told her
how to clean her PC and then I sent the same payment again as a one-off favor
and that was ok, no further trouble and we still work together today).

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pc86
Almost every link in the article is a referral or affiliate link.

~~~
justinzollars
It was like reading an advertisement

~~~
astura
It was an advertisement!

It fact, it as an advertisement without a disclosure of financial incentives;
which is in clear violation of FTC regulations.

[https://www.ftc.gov/tips-advice/business-
center/guidance/ftc...](https://www.ftc.gov/tips-advice/business-
center/guidance/ftcs-endorsement-guides-what-people-are-asking)

~~~
leethargo
I love the casual language of the page you linked! It's much more friendly to
the broad population and does pretty much devoid of legalese.

~~~
astura
Its good example of writing for your audience. The audience of that page is
bloggers, YouTubers, and social media "influencers."

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quizme2000
Most payroll processors handle this for you. HR and Payroll for teams under 50
should never be done in house, there are so many pitfalls. IMHO, until you can
hire a full time HR person, use a company to process/collect taxes, handle on
boarding paperwork, and your employee handbook. ADP, Zenefits, etc.. can
provide what you need to get started. You can always go internal later on once
you are setup and learn the risks. Payroll is like dental work, its best to
trust a professional that isn't you.

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codingdave
I worked for a 100% remote company for years. Although I wasn't involved in
the payroll details, my impression was that the problems were just
bureaucracy, and not as painful as this article implies. The answer to make it
work was, "Hire a payroll processor."

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ilaksh
Article is kind of an ad, but didn't know about Transferwise so glad I read
it. Anyone have any comments about Transferwise?

~~~
Androider
Works great in my experience. It comes out way cheaper than our business
banking for paying our workers in Europe from the US.

It's also really easy and convenient, while setting up wire transfers with our
Major Bank in the US was complicated and arcane. To date, Major Bank doesn't
offer us online wire transfers, for a business account!

We also use TransferWise to accept customer bank payments in Europe, without
having an actual presence there.

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nodesocket
I'd recommend Square Payroll[1] for US based 1099 contractor payments. They
handle sending the tax forms to the contractor at the end of the year and the
ACH transfer. The only bummer is that they don't support recurring, i.e. each
month send $X.

[1] [https://squareup.com/payroll](https://squareup.com/payroll)

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zeroxfe
I would love to know how companies can grant equity (vesting over time) to
remote contractors (i.e., without establishing a legal entity in the remote
country.)

~~~
JumpCrisscross
Signing an option contract with a vesting clause. Nothing about options or
vesting is inherently tied to employment.

~~~
toomuchtodo
Hazards abound if you're a US startup and have employees in other countries
that might treat ISOs significantly differently than the IRS.

~~~
JumpCrisscross
I don’t think you can grant ISOs to non-employees. That doesn’t stop you from
granting simple options. (It will probably be a tax headache, however.
Derivatives usually are.)

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mseebach
> Wire transfer fees are a set amount, usually around $40, not a percentage of
> the total amount transferred. You can do the math to figure out at what
> dollar threshold sending wire transfers through your bank becomes cheaper
> than using Transferwise.

Absolutely do the math, but keep in mind that fees are not the only fees when
doing FX: few banks will use the spot FX rate for wire transfers, they'll
typically add a spread of about 3%.

~~~
analyst74
yeah, you're getting skimmed hard between wire transfer cost and that spread.
If you have access to an FX brokerage with reasonable fee, definitely use
that.

I personally use Interactive Brokers, one free wire transfer per month, and
you can get spot price on your exchanges. Only fees I pay are a couple dollars
IB charges on exchanges, and twenty dollars or so my bank charges for
receiving wire transfers. Only downside is that they hold the money for 3
months before allowing withdrawal into a different bank.

~~~
delinka
"...and twenty dollars or so my bank charges for receiving wire transfers."

For business accounts or personal? I received a single wire transfer to a
personal account two months ago and didn't pay a fee. Maybe I get one free.
Maybe there would have been a fee for a business account.

But I'm certain I've never heard, until now, anyone mention fees for receiving
wire transfers.

~~~
analyst74
Mine was for personal. The bank payment system has myriads of complicated
rules/methods determining how they will charge you on a transfer, where the
bank is located, wire vs ACH vs direct deposit vs other clearing mechanisms,
international vs domestic, individual bank's progressiveness, your account
type, etc.

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zerr
Hire as long-term contractors - they send invoices at the end of the month,
you transfer the funds through regular wire transfer.

~~~
flamtap
Yep, that's how it works for me, working from Canada. I invoice on the 15th
and the last day of the month, wire transfer comes in a week later (just
because of how the company chooses to do payroll).

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ttoinou

       Outside of the US, everyone is considered a contractor, even if they're a full-time member of the company
    
    

Wait, so they are not full time employee. For example they can terminate the
contract and leave the company as they please

~~~
anemitz
In the U.S. this is how employees work as well -- they can leave a company for
any reason at any time. Conversely, employers can dismiss at employee for any
reason and at any time as long as it's not illegal.

~~~
ttoinou
Are there contracts made so that the relationship between employers and
employees is guaranteed/retained over a period of time ?

~~~
Androider
No, such limitations would likely be illegal (without additional compensation,
beyond the wages, also being stipulated for the period where the employee
couldn't leave / couldn't be let go) in many states. I have never seen such a
guarantee / requirement in an employment contract, such a "key man" provision
would likely be reserved for someone who is in possession of some critical
knowledge to the company and company is willing to pay for it.

It's a double edged sword. It's easy to be let go (basically, pack your stuff
and get out while escorted by security, just like in the movies), but it also
makes it much easier for companies to take a risk and hire you. In Europe,
hiring someone is a big risk and companies are extremely careful to hire since
they're taking on a big responsibility. As a result, permanently contracted
positions are even more common in Europe than the US as a result in my
experience.

~~~
heeen2
And yet US companies do homework assignments first round and 8 hour interviews
second round if not even more. I have had jobs offered after a two hour
technical interview plus 1 hour hr interview in Germany.

------
ayumukasuga
Meantime transferwise.com from article is down for more than 6 hours already,
be careful...

~~~
lioeters
I was keeping an eye out for mention/discussion of TransferWise. Been
receiving payments via their service for several months, and have found it to
be a well-designed experience, useful service with competitive/low fees.

Didn't know they've been down - related post:
[https://news.ycombinator.com/item?id=17364752](https://news.ycombinator.com/item?id=17364752)

------
bitL
Isn't it better for your contractors to incorporate an LLC or S-Corp in
Delaware and for you to send money to those companies, so that contractors can
deal with their own taxes themselves? LLCs would work also for foreign
contractors.

------
Geee
Cryptocurrencies are a great way to pay remote employees or contractors with
low fees.

~~~
swyx
what are the fees all-in? just buying the thing is say 1% then you have
miner's fees of 0.3%? something like that?

~~~
Geee
Transactions in cryptocurrency can be zero-fee with NANO. Bitcoin transactions
can be also free or almost free when using Lightning network. On-chain Bitcoin
transactions are priced by markets and can be high when the network is
congested, but are currently very low (about $0.2).

Exchanging to and from local currency depends on how you do it. Most of the
cost comes from the volatility, which in general might turn into profit as
well. Exchanging at ATMs or 'quick buy/sell' services can be pricey (5% or
so). Transferring fiat currency to/from a bank account is generally free.

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senatorobama
Anyone know of remote companies that hire systems programmer not front end or
backend for a web app?

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jkempe11
Quick callout: we're hiring at Gusto if anyone wants to join us...

gusto.com/careers

------
sireat
Hilariously sad: The Last Day for Shipping to Europe (For Now) Will be May 24,
2018

Why in the world a backpack business would be so worried about GDPR?

~~~
darpa_escapee
Some are responding to the GDPR in a quixotic fashion akin to those who boast
about not taking a raise because they "don't want to pay more in taxes" after
getting bumped into a higher income bracket.

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pope-mobile
removed

~~~
tgroutars
I always find it funny when people say it's only 15USD when a wire transfer in
Europe in free

~~~
rurban
It's 40USD to of from the US, and no European bank wants to deal with the
arcane way US wire transfers are handled. If you want to deal with that crap
you have to pay the premium. It's not that much of a burden, because US rates
are much higher than European rates, so you are still winning a lot. Just
banks hate it.

