Receiving Salary from The US, Best Option?

Ltdlemon1900 on 13/07/2017 - 08:53
Last edited 13/07/2017 - 20:39

Hi all,

Been thinking about working remotely for US companies. What are the best options to receive salary in Australia?

Some companies indicated they can do wire bank transfer with a US$30-40 fee which will be deducted from the salary. They can also do PayPal but there is a % fee too.

I'm wondering if there is anything I should watch for or do so that I can minimize the fee and also get the best exchange rate?

A friend reckons PayPal might give a better exchange rate than banks in general. Although PayPal might have more limitations with withdrawal. Or is there a bank that offers better rates?

Also is it worthwhile having a foreign currency account for this too?

Thanks heaps.

Financial

Comments

  • the cheeky dropbear on 13/07/2017 - 09:01
    +6

    Extend the time interval between each payday, so rather than getting paid weekly, get paid fortnightly or monthly even.

    You would be able to reduce the overall amount of transfer fees you would pay?

  • singlemalt72 on 13/07/2017 - 09:04
    +1

    Have them invest it in an $80k car and ship it!

    • 00 on 13/07/2017 - 09:42
      +2

      Right Hand Side Drive?

      • theHMASfriendship on 14/07/2017 - 08:54
        +1

        No need to drive it, just park it at work to impress your colleagues

        • 00 on 14/07/2017 - 12:34

          Trade in the eneloops and use the Tesla as your primary smartphone recharger.

  • gobbledegook on 13/07/2017 - 09:09
    +2

    Assuming that they are paying you the equivalent in AUD into your Australian bank account? Try something like www.transferwise.com

    The rates are excellent for occasional users.

    • firstworldproblems on 13/07/2017 - 09:37

      +1 transferwise. i have used them before, not only the best rates, but ridiculously fast as they don't perform wire transfers in the usual sense. (i recommend you read into it, it's an interesting concept)

      • tdlemon1900 on 13/07/2017 - 10:23

        Thanks both for suggesting transferwise. Just had a quick look. I guess one concern would be getting the company to use transferwise if they haven't already been using it.

        • cloudy on 13/07/2017 - 12:19

          I remember Scotty and the ozbargain crew use OZforex when paying their NZ staff salary. I think ofx is pretty common so check if ur employer uses them. Or check ozforex, whom may have a solution for you ( I'm thinking they have a US bank account, ur boss pays in, and they recognize it's urs and transferr into ur Aussie bank, minus the fee.

        • macca9123 on 13/07/2017 - 14:14
          +4

          I work remotely and get paid in USD. The cheapest way that I have found where my employer can just do a regular bank-to-bank wire transfer is to open a Citibank Plus account. Last I checked their exchange rate was about 1.3 cents off the interbank exchange rate. This compares to about 3.5 cents for the big banks.

          I would have liked to have used OzForex, but like many other transfer services you need to book in the exchange first and then send them the money with a particular reference number, and this process is just not scalable for my boss who has a whole team who are remote. I initially tried using my credit union who were cheaper still (about 1.1 cents off the interbank rate), but because they weren't a bank they used Western Union to receive the funds and perform the currency exchange. The whole process again relied on special reference codes to be recognised by Western Union and it was just unreliable. If my employer made a fat finger mistake then the funds would go missing for weeks until it was reversed and corrected.

          Also, ensure you withhold appropriate tax. At the end of the first year you will have a giant tax bill to pay and hopefully an equally giant chunk of savings that you haven't converted into eneloops. Thereafter the ATO will send you a quarterly PAYG statement based upon the previous years earnings (indexed for inflation).

    • Randxyz123 on 13/07/2017 - 09:44

      Agreed! That or currency online.

    • tdlemon1900 on 13/07/2017 - 10:09

      Companies will have USD obviously, so maybe I can receive them and keep them as USD, unless there is a reason not to do this?

      • djkelly69 on 13/07/2017 - 10:54

        Are you going to be making payments or spending money in USD? Otherwise currency fluctuations may be a risk.

  • dasher86 on 13/07/2017 - 09:42
    +8

    Try to open a US Citibank account?
    Link with Aus Citibank account.
    Transfer

    • tomsco on 13/07/2017 - 12:41

      That's what I thought. Or see if you can find a similar card to Citibank Plus that you can get sent over.

    • Randxyz123 on 13/07/2017 - 13:22

      I'm pretty sure Citibank US is separate to Citibank Aus.. Happy to be proven wrong.

      Also to open a US bank account you need a US mailing address and SSN /exemption number for tax purposes.

      • dasher86 on 13/07/2017 - 14:23

        yes separate but you can link them to do free transfers between accounts…
        i believe HSBC have something similar although no fee free.

  • airzone on 13/07/2017 - 09:50
    +1

    Just watch your tax liabilities. In an old company, we had someone under this arrangement. He never declared to the ATO.. They found out and he got stung with more than a decade of taxes.

    • tdlemon1900 on 13/07/2017 - 10:24

      Thanks for the heads up. I bascially will have to manage my own tax.

      • shortblack9 on 14/07/2017 - 09:15
        +1

        Also, make sure you're safe with the IRS (ATO equivalent) in the USA. I have a friend that was taxed both by the IRS and also by the ATO (I'm not sure if that was because she was a US citizen, maybe it was an unusual situation… the IRS came after her).

        Regardless… better to be safe than sorry.

  • GC67 on 13/07/2017 - 12:40

    Send them a monthly PayPal invoice?

    GC

    • Aussie Smurfette on 16/07/2017 - 18:33
      +1

      Then you would be charged a fee for the payment as well as a conversion fee

  • insular on 13/07/2017 - 13:08
    -1

    cash money

  • onetwothreefour on 13/07/2017 - 13:34

    What type of work out of interest?

    • tdlemon1900 on 13/07/2017 - 20:40

      IT consultant type work.

  • Chik5555 on 14/07/2017 - 08:45
    +1

    I get paid commission type payments from two US companies. They send monthly payments via PayPal. The only fee I know of is the currency conversion fee which is factored in when I withdraw it as AUD to my bank account. Not sure what that fee is, never looked into it as I don't have any other option

    • tdlemon1900 on 14/07/2017 - 22:35

      For PayPal, do you have a personal account or a business account for this?

      • Chik5555 on 15/07/2017 - 07:09

        Just a personal account

  • kuls on 14/07/2017 - 16:11
    +2

    Last year I worked remotely for a US company. We agreed to a monthly payout of fixed AUD amount. At the end of every month, they did an international bank transfer of the agreed upon AUD amount. So, the exchange rate never affected the amount that I got. I never paid any fees except the bank handling charges ($12) that were deducted by my bank (NAB) everytime I received the money. To avoid tax in the US, I had to fill form W8BEN. For tax purposes here in Australia, just make sure that you have an ABN (sole trader) and keep all the invoices and bank letters (to claim back the bank handling charges) with you.

    • tdlemon1900 on 14/07/2017 - 22:36

      Thanks for the tips with the US tax, will look.

      Must I get an ABN for this?

      • Aussie Smurfette on 16/07/2017 - 18:32
        +1

        Yes, as you are basically working as a sub contractor, ABNs take 5 minutes on the net to do.

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