Best Payment Method for Freelancers?

JunkieKong

Hey all, this question is for all the seasoned freelancers on Polycount. I've been freelancing for a couple years now with moderate success, but I still haven't landed on an ideal method for receiving payment from international clients. I'm in Australia so most of my work comes from overseas, for some clients a direct bank transfer is best for me because its just a fixed conversion fee per transaction but it can be a big fee for the sender depending on their bank. I also use Paypal but only just realised that when I receive a foreign currency I get charged an additional fee for currency conversion (probably not at a great rate either) on top of the 2.9% cut they take. And it adds up.

So I'm basically wondering what services others use for payment and what their experiences have been, especially if its foreign income? It might be worth sticking with Paypal just because its convenient and everyone has an account.

JunkieKong

Nobody has any thoughts? That's cool.

Jonas Ronnegard

Hello, 

I always get paid by wire transfer / bank transfer from studio clients, which is always ideal,
for other things I get paid with paypal which is less ideal since they have hidden fees in the currency exchange which is always about 5% less or more then the current market, so it's the same as they take a 5% fee on international transfers.

At the same time I also use paypal to pay work I outsource since it is simple and easy.

JunkieKong

Hey Jonas, yep I'm only finding out about these hidden Paypal fees recently which is why I ask about alternatives! Bank transfer would be good, I just assume for clients in the US or UK the bank fees must be pretty high to send money which is why they prefer Paypal. More research required.

Btw love your work man, I see ads for your stuff on Facebook all the time!

Jonas Ronnegard

Yeah but usually the bank fees are a set fee so it doesn't take a %, which is a lot better, so yeah for studio clients I would do bank transfers for sure, actually I think I never have been offered any other option.

For smaller teams myself included it can be easier especially for smaller amounts of money, to pay by paypal which is why thats what they are offering.

Thanks a lot Junkie

almighty_gir

I usually take direct bank transfers.

Marmoset used to pay me straight cash, delivered by courier direct from the US...

zetheros

Hey Junkiekong,

Have you tried google wallets? Very easy to set up, and no fees iirc.

JunkieKong

@almighty_gir haha yeah my old man often does work for a company in the US and they pay by FedExing a cheque to Australia, which takes weeks and seems really unsafe but I guess they can get around bank fees that way.

@zetheros I've used google wallet maybe a few times to make purchases, thought I looked into it and it had similar fees to Paypal? Maybe I need to go back and have a better look.

Larry

I was reading your discussion guys and I have a couple of questions if you'd like to answer.

1) Do you ask for the money before you do the job or after it is done?
2) Do you send renders to show that it is done so that you get paid?
3) And have tou started a business model,paying taxes to your country and then start searching for clients?

JunkieKong

Hey Larry, in my experience:

1) Yes you should definitely ask for something upfront. A shorter job with a smaller payout I'd probably ask for half up front and the remainder on delivery of work. For larger jobs maybe ask for a smaller percentage in advance, its basically just a way to know that they are good for the money.
2) Certainly a good idea to communicate often with the client, don't just send them final renders at the very end, show them WIPs as you are working so you can get feedback and make sure you're on the right track.
3) Not entirely sure what the question is but yes, yes you should pay taxes to your country so you don't end up in prison with Wesley Snipes.

JunkieKong

Also backtracking to being payed with Google Wallet - turns out they don't even do international money transfers, at least not for Australia so it's no good for me. Besides that I'm sure it's great.

Larry

JunkieKong said:

Hey Larry, in my experience:

1) Yes you should definitely ask for something upfront. A shorter job with a smaller payout I'd probably ask for half up front and the remainder on delivery of work. For larger jobs maybe ask for a smaller percentage in advance, its basically just a way to know that they are good for the money.
2) Certainly a good idea to communicate often with the client, don't just send them final renders at the very end, show them WIPs as you are working so you can get feedback and make sure you're on the right track.
3) Not entirely sure what the question is but yes, yes you should pay taxes to your country so you don't end up in prison with Wesley Snipes.

What I meant is, did you have to set up a business, start paying taxes without having any jobs at the beginning? Like,put money from your pocket to pay taxes until you find clients? Because having a business has monthly costs even if you dont have customers.
I am asking this because being someone new in the industry with no connections, cannot guarantee a single customer for months. I read the articles about freelancing and nowhere does it give any information on how to start. Setup a hussiness and pay taxes first, or find your first customer and at that time set up your business?

JunkieKong

Ah I see what you mean, I imagine laws around this are different between countries but in Aus it costs nothing to register as a business, nor do you need to pay any kind of tax or fees just to keep the "business" existing. The only tax you pay is on income, which you won't need to worry about until you start earning money from clients. Matter of fact, I don't even need to be a "business owner", I only needed to register for my very first job and since then I just pay tax as an individual, like most people would.
Circumstance might be different if you were the boss and were hiring workers, but if the business is just you (like a sole contractor), you shouldn't even need to worry about paying taxes until that skrilla is rolling in.

Larry

JunkieKong said:

Ah I see what you mean, I imagine laws around this are different between countries but in Aus it costs nothing to register as a business, nor do you need to pay any kind of tax or fees just to keep the "business" existing. The only tax you pay is on income, which you won't need to worry about until you start earning money from clients. Matter of fact, I don't even need to be a "business owner", I only needed to register for my very first job and since then I just pay tax as an individual, like most people would.
Circumstance might be different if you were the boss and were hiring workers, but if the business is just you (like a sole contractor), you shouldn't even need to worry about paying taxes until that skrilla is rolling in.

i was thinking about that but if i make contracts with employers, the government might see it. Also i cannot explain the cash that will be flowing in my account, if they exceed 5.000euros in one year

JunkieKong

Wow you've made being a freelancer sound really shady now haha. If you are really this unsure about paying taxes as a freelancer, I would recommend talking to a local accountant. Bottom-line is don't let it get in the way of you finding work.

Larry

I live in Greece and bureaucracy here is crap... Anyway thanks alot for your help take care!

RN

Last time I checked, Payoneer had slightly smaller fees for international transfers and currency exchange than PayPal. Not sure if it's worth it, that's up to you.