Source: https://rivet.global/blog/pay-contractors-in-canada-from-us
Published: 2026-09-14 · Updated: 2026-09-14 · By Alexia M.

# How to pay contractors in Canada from the US

Paying Canadian contractors from a US company: CAD by EFT vs USD wires, Interac e-Transfer, GST/HST for the contractor, W-8BEN and how routes compare.

## Key takeaways

- Canadian bank accounts use an institution number, transit number and account number for EFT payments.
- A USD wire to a Canadian bank account is converted at the bank's rate unless the contractor has a USD account.
- Canadian contractors charge GST/HST to Canadian clients but generally zero rate services to non-residents; that is their obligation.
- Collect a W-8BEN; no 1099 is due for work done entirely in Canada.

Canada is next door, shares a time zone and is one of the most common places for US companies to hire contractors. Paying in CAD locally avoids the conversion most Canadian banks apply to USD wires.

## Routes

| Route | Notes |
|---|---|
| USD wire to a Canadian bank | Converted at the bank's rate, or credited to a USD account |
| CAD by EFT | Local transfer, 1 to 2 days |
| Interac e-Transfer | Domestic; needs a Canadian sender |

## What you need

- Institution number, transit number and account number.
- The contractor's legal name.
- A W-8BEN.

## A $6,000 monthly payment

A Canadian bank converting an incoming USD wire applies its own rate, which can sit well away from mid-market, and may charge an incoming wire fee. A CAD payout at a published 0.5% margin is easy to check against the Bank of Canada rate, and you can still agree the amount in USD in the contract.

## Paying into the United States: the local rail

| What | Detail |
|---|---|
| Local rail | ACH for batch payments; RTP and FedNow for instant transfers |
| Run by | Nacha for ACH; The Clearing House for RTP; the Federal Reserve for FedNow |
| Settlement | Same-day ACH within the business day, standard ACH the next; RTP and FedNow in seconds, 24/7, where both banks take part |

Source: [Nacha: Same Day ACH](https://www.nacha.org/rules/same-day-ach-moving-payments-faster). Checked when this guide was last updated; the scheme's own page has the current figures.

## Where Rivet fits

Rivet pays contractors in Canada in CAD on local rails from your USD balance, and pays 120+ other countries the same way. Scale adds CAD account details if you also earn Canadian dollars. Fee and FX show before you confirm. Rivet is not a bank; regulated partner institutions hold the funds. See [CAD business account](/blog/cad-business-account).

## Questions

### What is the cheapest way to pay a Canadian contractor?

Usually a CAD payout by EFT from a provider with a low FX margin.

### Can I use Interac e-Transfer?

Interac is a Canadian domestic system. You need a Canadian account or a provider that offers it to send.

### Should I pay in USD or CAD?

Ask the contractor. Many hold USD accounts at Canadian banks; most prefer CAD for everyday use.

### Do I withhold US tax?

Not for non-US persons working entirely outside the US. Collect a W-8BEN.