Working remotely for foreign companies as a South African, Part 1: Getting Paid!

This is part 1 of my guide on how to handle your finances and taxes when working for remote companies as a South African resident.

Check here for the intro to this post.

Let's start with the good part: earning that sweet moolah.

Getting paid has gotten a bit more annoying over the years, given South Africa is on the FATF grey list and SARB isn't too friendly with forex generally.

You'll mostly be fine once you pass the compliance checks. There are three major ways to get paid which I'll outline.

Method 1: Your company handles payroll

For companies hiring lots of people internationally, they may already be using a global payroll/Employer of Record (EOR) service like Deel or Remote.

Ideally you will be hired by a locally incorporated company of the EOR and will be "contracted" out to the real company. The EOR will handle payroll for the company and you'll be paid as normal, albeit potentially with some international transfer delays here and there.

More often, you'll just be a contractor for the EOR than an employee, and they'll handle the payroll. This makes life easier for the company and takes away your own admin burden of getting paid into your ZA account.

Method 2: Using a payments company

If your company does not use and global payroll service, or if you have the option, this is what you'll be doing. On the plus side, it gives you the most control over timing and finances, and the fees and exchange rates are often better than what your bank or a forex company like Western Union. On the downside, it has its own nuances to be aware of.

Some good options for getting paid are Wise, Payoneer and OFX, and PayPal.

For this post I'll be focusing on Wise as I have the most experience using them.

Signing up with Wise

Sign up to Wise (Referral link), go through all the compliance hoops, and send some funds through to open a currency account balance in the currency you'll be getting paid in (if available). This will give you "native" account payment details that will let your company pay you faster, as if they were doing an EFT equivalent.

Now, when you get paid into Wise, and then send those funds to your South African account, send the funds as ZAR from Wise directly. In the background, Wise will be converting the funds to ZAR directly and EFTing you from their local forex partner company. This means you can get funds a little quicker than if you were waiting 3+ days for SWIFT transfers.

Compliance

Here comes the compliance part. Yearly, you will have to sign a SARB mandate form for each account you receive funds into from abroad. Wise's local partner (currently Bidvest IIRC) will send you this every year to fill out. They will also send this the very first time you are to receive funds. This will likely delay how quickly you receive your money the first time around, so plan accordingly.

Lastly: Never leave funds lying around in any provider, including Wise. Always send money straight through to your actual bank account. There are plenty of horror stories with all providers, including Wise, screwing people over with little to no recourse, especially if they aren't true banks.

With global Know-Your-Customer and Anti Money Laundering (KYC/AML) as they are, payment companies are very risk averse and legally obligated not to tell you why you're locked out.

Method 3: Just use SWIFT

This can be the slowest and most expensive option (fees and exchange rate), and likely the most complicated for your company to handle every month to pay you.

If you want to go this way, speak to your company about what they think is the best way to handle it.

Like with method 2, you will have to sign yearly mandate forms for receiving the funds, as well as assign a Balance of Payment (BOP) code to the funds when you receive them.

These are the main three ways to get paid from abroad as a remote worker.

Of course, there's more to it than just getting paid - your relationship to your company and thus your tax status is also impacted.

How?

I'll cover that in the next post. Follow me to stay tuned!

If you'd like to read my work early, go to my website in my profile :)