How to pay contractors in Pakistan from the US
Pakistani contractors usually receive PKR in their bank account. How the payment is coded at their bank affects their records and, for registered IT exporters, their tax rate.
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Pakistan's freelance and software workforce is one of the largest in the world. For US companies, paying it well means paying into the contractor's own bank account with the right description.
Routes
| Route | What happens |
|---|---|
| USD wire to a Pakistani bank | Converted to PKR or credited to a foreign currency account |
| PKR local payout | Your provider converts and pays locally |
| Platform | Platform fees and FX |
The purpose code
Pakistani banks classify inbound payments. Income for IT services is export proceeds, which matters for the contractor's tax treatment and records. Ask the contractor what description their bank needs.
Your side
- W-8BEN.
- Pay against invoices with references.
- Keep receipts.
A monthly run, step by step
- Collect the W-8BEN and bank details once, with the account title exactly as the bank holds it.
- Agree the purpose of payment the contractor's bank needs, such as software development services.
- Receive the invoice, pay on a fixed date and use the invoice number as the reference.
- Share the payment receipt so the contractor can match it to the bank's advice.
Mismatched account titles are the most common reason a payment to Pakistan is delayed or returned, so check the name before the first run.
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. Checked when this guide was last updated; the scheme's own page has the current figures.
Where Rivet fits
Rivet pays contractors in Pakistan and 120+ other countries from your USD balance, in local currency on local rails where available, with fee and FX shown before you confirm. Rivet is not a bank; regulated partner institutions hold the funds. See Payoneer alternatives in Pakistan, India and Bangladesh.
Questions people ask
How do I pay a contractor in Pakistan?
By international wire to their bank, or through a provider that pays PKR locally. Ask how they want it coded.
Why does the purpose code matter?
It tells the receiving bank what the money is for. Export proceeds for IT services can carry different tax treatment from a family remittance.
What is Raast?
Pakistan's instant payment system, run by the State Bank of Pakistan, for local transfers.
Do I withhold US tax?
Not for non-US persons working entirely outside the US. Collect a W-8BEN.
Sources
Alexia compares the accounts, cards and payment tools companies weigh before they switch, and writes Rivet's market guides for founders in a specific country. Prices in Alexia's comparisons come from each provider's own pricing page on the date given in the article, rules come from the regulator or tax authority that sets them, and every source is listed at the end.
More from Alexia M. →This article is general information, not legal, tax or financial advice. Rules and fees change; check the sources above and the provider’s current terms before you act on them.
- pay contractors in pakistan
- usd to pkr
- raast
- it exports
- pseb
- w-8ben
