The advertised price is never the full cost
Every contractor payment platform advertises a headline price. Deel charges $49 per contractor per month (Deel Shield) or charges per payment on their free tier. Remote charges $29 per contractor per month. Omnivoo charges $49 per contractor per month. Wise charges a percentage per transfer with no monthly fee.
But the headline price is only one component of the total cost. The actual cost of paying an international contractor includes four layers: the platform fee (monthly or per-transaction), the FX conversion spread (the difference between the mid-market rate and the rate you actually get), the bank or payment rail fee (transfer costs), and any tax withholding obligations (which depend on both parties’ countries).
Most founders compare only the first layer. The other three can double the effective cost without appearing on any invoice from the platform.
Case study: Paying a $5,000 per month contractor in India
A US company pays a software engineer in Bangalore $5,000 per month. Let us trace the full cost through four different payment methods.
Through Wise (direct transfer, no platform): Wise charges approximately 0.6% to 0.8% on USD to INR conversion. On $5,000, that is $30 to $40 per transfer. No monthly fee. No contract management, no tax withholding, no invoice linkage. Annual Wise cost: approximately $420. But there is no TDS compliance, no audit trail, and no misclassification check. If Indian authorities determine TDS should have been deducted (10% on technical services), your retroactive liability is $6,000 per year plus interest.
Through Deel (Contractor product): Deel’s per-contractor fee is published at various tiers. Using the Shield product at $49 per month, that is $588 per year. FX markup on Deel is not published but independent analyses estimate 2% to 4% embedded in the exchange rate. On $60,000 annual payments, that is $1,200 to $2,400 in hidden FX costs. Total annual Deel cost: approximately $1,788 to $2,988.
Through Omnivoo (Contract Management): $49 per month is $588 per year. Transaction fees pass through at cost (payment rail fees only, no Omnivoo markup on FX). Estimated pass-through costs on $5,000 monthly: approximately $20 to $30 per transfer. Total annual Omnivoo cost: approximately $828 to $948. Includes contract generation, misclassification checks, invoice management, and TDS handling.
Through a bank wire (direct): Bank wire fees vary from $25 to $50 per transfer. FX spread on bank wires is typically 1% to 3%. On $5,000, that is $50 to $150 per transfer. Annual cost: $900 to $2,400 in fees alone, with zero compliance infrastructure.
The FX markup that nobody talks about
FX markup is the single largest hidden cost in international contractor payments. It works like this: the mid-market exchange rate (the real rate you see on Google) is, say, 1 USD = 83.50 INR. The platform converts your payment at 1 USD = 81.80 INR (a 2% markup). On a $5,000 payment, you send $5,000 but the contractor receives the equivalent of $4,900 in INR. The platform keeps the $100 difference.
This never appears as a line item. It is invisible unless you compare the conversion rate shown on your receipt against the mid-market rate at the time of transfer. Most founders never check.
Omnivoo’s approach is different. Payment rail fees (the actual cost charged by the banking infrastructure to move money) pass through at cost. Omnivoo does not add a spread to the exchange rate. For EOR payroll specifically, there is a flat 0.4% conversion fee on USD to INR, which is published and visible in every transaction.
Tax withholding: the cost that is not optional
Tax withholding is not a platform fee. It is a legal obligation that varies by country. But it is part of the total cost of paying a contractor, and ignoring it creates liability.
When a US company pays an Indian contractor for technical services, TDS at 10% is required under Section 194J of the Indian Income Tax Act (if paid through an Indian entity) or under the India-US tax treaty provisions if the payment is direct. On $5,000 per month, that is $500 per month withheld and deposited with Indian tax authorities.
When paying a US contractor as a foreign company, there is generally no withholding required if the services are performed outside the US. But if the contractor performs any work on US soil, FDAP withholding rules may apply at 30% (reducible by treaty).
The key point is that these obligations exist regardless of which payment method you use. Wise does not handle them. PayPal does not handle them. Your bank does not handle them. A contractor payment platform like Omnivoo computes the required withholding based on both parties’ jurisdictions and either deducts it automatically or flags it for your action.
The total cost comparison table
For a $5,000 per month contractor in India, paid over 12 months ($60,000 total):
| Method | Platform fee | FX cost | Bank fees | Compliance | Total / year |
|---|---|---|---|---|---|
| Wise direct | $0 | ~$420 (0.7%) | $0 | None on platform | $420 + uncovered risk |
| Deel Shield | $588 | ~$1,200–$2,400 (2–4%) | included | included | $1,788–$2,988 |
| Omnivoo Contract Mgmt | $588 | ~$0 (pass-through) | ~$300 (pass-through) | included | ~$888 |
| Bank wire | $0 | $600–$1,800 (1–3%) | $300–$600 | None on wire | $900–$2,400 + risk |
The cheapest compliant option is Omnivoo at approximately $888 per year. The cheapest option overall is Wise at $420, but it carries no compliance infrastructure, which means the first audit or misclassification dispute costs more than the savings of a decade.
How to calculate your own total cost
Use this formula for any contractor payment scenario:
Total annual cost = (monthly platform fee multiplied by 12) + (monthly payment amount multiplied by FX markup percentage multiplied by 12) + (per-transfer bank fee multiplied by 12) + (annual tax withholding compliance cost, either handled by the platform or by your accountant).
Ask every platform three questions before signing up. First, what is the exact FX conversion rate you apply, and is it the mid-market rate or does it include a spread? Second, are payment rail fees passed through at cost or marked up? Third, does the platform handle tax withholding computation and deposit, or is that my responsibility?
If a platform cannot answer these questions clearly, the costs you cannot see are the ones that will add up. Compare the full picture on the Omnivoo pricing page.