Source: https://rivet.global/blog/pay-contractors-in-pakistan-from-us
Published: 2026-09-11 · Updated: 2026-09-11 · By Alexia M.

# How to pay contractors in Pakistan from the US

Paying Pakistani contractors from a US company: PKR to a bank account, home remittance vs export proceeds, Raast, tax incentives for IT exporters and W-8BEN.

## Key takeaways

- Pakistani contractors receive foreign payments into their bank accounts in PKR, or into foreign currency accounts where they hold one.
- The purpose code on the inbound payment matters to the contractor's bank and tax records, especially for IT export income.
- Pakistan offers reduced tax treatment for registered IT and IT-enabled service exporters; the contractor should check FBR and PSEB rules.
- Collect a W-8BEN and pay against invoices.

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

1. Collect the W-8BEN and bank details once, with the account title exactly as the bank holds it.
2. Agree the purpose of payment the contractor's bank needs, such as software development services.
3. Receive the invoice, pay on a fixed date and use the invoice number as the reference.
4. 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](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 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](/blog/payoneer-alternatives-pakistan-india-bangladesh).

## Questions

### 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.