You got the offer. Then the contract arrives and asks you to pick a "withdrawal method," fill in a US tax form, and decide whether to invoice monthly. Most LATAM engineers have never done any of this, and small choices here can cost a few hundred dollars a year in fees, or a lot more if the setup is wrong for your taxes.
This is general information from what we see every week, not legal or tax advice. Rules change by country. Check your setup with a local accountant.
Key Takeaways
- Most US companies pay LATAM engineers in one of two ways: as an independent contractor or as an employee of an employer of record (EOR) in your country.
- As a contractor you usually fill in IRS Form W-8BEN, invoice in USD, and handle your own local taxes.
- The money arrives through a platform like Deel, Wise, or Payoneer, and the fees are mostly in withdrawal and currency conversion.
- Compare the total cost to get money into your local bank, not the headline fee.
Contractor or EOR employee?
| Independent contractor | Employee through an EOR | |
|---|---|---|
| Who employs you legally | Nobody. You're a business providing a service | A local company (the EOR) in your country |
| How you're paid | You invoice, usually monthly, in USD | Local payroll, often in local currency |
| Taxes | You register and file yourself | Withheld by the EOR |
| Benefits | None unless negotiated | Local legal benefits (vacation, social security, bonuses where required) |
| Flexibility | High | Lower, it's a local employment contract |
An EOR, in Deel's own definition, is an organization that employs and pays workers compliantly on a company's behalf, handling payroll, tax withholding, and local benefits. The US company still decides your salary and manages your work.
Contractor setups are more common with startups because they're simpler and cheaper for the company. That's also why, as we explain in how to answer salary expectations, a contractor's rate should be higher than an employee's salary for the same role.
The paperwork for contractors
Form W-8BEN. US payers typically ask foreign contractors for this form. The IRS says to give Form W-8BEN to the withholding agent or payer if you are a foreign person and the beneficial owner of the income. It documents that you're not a US person. Platforms like Deel usually collect it during onboarding. Fill in your real tax ID from your country.
Local registration. In most LATAM countries you need to be registered to invoice for services: the details depend on your country's tax authority and the regime you pick. This is where a local accountant earns their fee. Some countries have simplified regimes for service exports. Ask about them.
The contract. Read the payment terms: invoice date, payment date (net 7, net 15, net 30), currency, and who pays transfer fees. Also check the IP clause and the notice period. For how code ownership usually works, see who owns the code a contractor writes.
The platforms, and where the fees hide
The company usually picks how it sends the money. You often pick how you take it out. Fees below are from each platform's official pages as of September 2026 and change often, so check before you choose.
Deel. Many US companies pay contractors through Deel. Deel says it offers 10+ withdrawal methods, with fees that depend on the method and country. Examples from that page: no Deel withdrawal fee to Wise (Wise's own fees still apply), 1% to Payoneer, 2.5% to PayPal, and a 2% fee for instant card transfers outside the US.
Payoneer. Receiving into a Payoneer account in your local currency is free, but a receiving account in a currency that isn't your local one, which USD is for most of LATAM, costs 1% (minimum 1 USD) per Payoneer's pricing page. Card payments from clients cost up to 3.99% + $0.49, ACH bank debit from US clients 1%. Withdrawing to a local bank in local currency is where conversion costs show up, and there's a $29.95 annual fee on low-activity accounts.
Wise. Wise gives you USD account details. Per its receiving fees page, domestic non-wire USD payments like ACH are free to receive, while USD wires carry a fixed fee per payment (a little over $6 when we checked). The main cost is the conversion to your local currency when you withdraw.
Direct SWIFT wire. Some companies just wire you. Simple, but intermediary banks and your local bank can take fees on both ends, and the exchange rate your bank gives you may be poor.
The number that matters: out of a USD 5,000 invoice, how much lands in your local account? Test with a small amount before your first big payment.
A Concrete Version
A composite example with round numbers. Camila, a contractor in Lima, invoices USD 5,000 a month through Deel.
Option A: withdraw to PayPal. Deel's page lists 2.5%, so about USD 125 gone before PayPal's own conversion and withdrawal costs. Over a year, well over USD 1,500.
Option B: withdraw to Wise. No Deel withdrawal fee. Wise then charges a conversion fee when she moves money to soles, shown upfront in its calculator. Suppose it comes to USD 30 to 50 a month. Over a year, a few hundred dollars.
Same salary, a difference of more than a thousand dollars a year, from one dropdown. She also keeps some money in USD rather than converting everything, since she pays some expenses in dollars anyway.
The Honest Counterpoint
Cheapest isn't always best. Some platforms don't support every country or local bank equally well, some local banks flag payments from fintechs, and a few countries have currency controls where the official exchange rate and the rate people actually use differ a lot (Argentina has historically been the clearest case). In those places the right setup is a local-expert question, not a fee comparison.
Contractor status also has a real downside: no paid vacation, no employer social security, and you carry the tax filing. If stability matters more to you than flexibility, ask whether the company offers an EOR option, even at a lower number.
Frequently Asked Questions
Do I pay US taxes as a LATAM contractor?
The IRS says a nonresident alien is generally subject to US income tax only on income from US sources, and that the source of income for personal services is where the services are performed. So work done from your home country usually isn't US-taxed, but you do owe taxes in your country. Confirm your own case with an accountant.
Can I ask to be paid in crypto?
Some platforms allow stablecoin withdrawals, with their own fees. Check your country's tax treatment first.
Who pays the transfer fees?
It depends on the contract. Ask before signing, and get it in writing.
The Bottom Line
Know if you're a contractor or an EOR employee, fill the W-8BEN correctly, register locally, and compare the full cost of getting money into your bank. Ten minutes of setup saves real money every month. When you're ready for a US role, see what's open at /jobs, including Go backend and React Native. And read how to get a remote job with a US company from LATAM for the full path.
Roberto Espinoza is CEO of Ruzora, which places senior LATAM engineers with US startups. Browse open roles.
