Find out how the company sets pay
Before you name a number, learn how the company decides pay. Remote employers tend to use one of three models.
- Local market pay. The company pays what the role pays in your country. GitLab, which published its reasoning in 2019, said it aims to pay at or above the market rate where each person lives, and that it isn't trying to pay people based on their rent.
- Location bands. The company takes one benchmark and adjusts it by band. Buffer's 2017 formula, for example, paid 100%, 85% or 75% of a San Francisco median depending on a person's cost-of-living band. Buffer has changed its formula since, which shows these systems move.
- One rate for everyone. Some companies pay the same salary for a role wherever you live.
It's fair to ask the recruiter directly: "Is pay for this role location-based? Which band or range applies to someone in my country?" Their answer shows how much room you have to negotiate.
Work out your number
Go in with a range you've worked out, not a guess.
- Look at posted ranges. Some job ads show a salary range. Note the range for similar roles, and whether it's for a specific country.
- Price the role, not your current salary. A remote role for a company abroad is a different market from your last local job. Your old pay isn't the right anchor.
- Know your floor. Add up what you need each month, including internet, power backup and a reserve for tax, and don't go below it.
If you're a contractor, price in what an employee gets
Employees get paid leave, public holidays, pension or social security contributions, and sometimes health cover and equipment. As a contractor you pay for all of that yourself, plus tax with no one withholding it. So a contractor rate should be higher than the salary for the same work. Count the days you'll actually bill in a year, after leave and holidays, and set a rate that covers your full costs on those days. Our guide to contractor vs employee roles goes into the differences.
Choose the currency with care
Currency is part of the deal, not a detail.
- Dollars, euros or pounds protect you if your local currency weakens, but your bank's exchange rate and transfer fees can eat into each payment.
- Local currency, common with employer-of-record payroll, is simple to spend and save, but the real value of your pay can drop if the currency falls. Ask when salaries are reviewed.
- Transfer fees. On bank transfers, correspondent banks can take fees along the way. Wise puts them at roughly 15 to 50 US dollars a payment, sometimes more. On a monthly invoice, that's a real cost. Agree in writing who pays them.
For a contract paid in your local currency, you can ask for a clause that reviews the rate if the exchange rate moves by more than an agreed amount. For a contract in dollars, ask for the payment method that leaves the most in your account. Our guide to getting paid from abroad compares the options.
Invoicing terms for contractors
If you invoice, your terms protect your cash flow. Agree these before you start, and put them in the contract:
- Rate and unit. Hourly, daily, monthly or per project. If it's monthly, say how many hours or what scope it covers.
- Invoice schedule. For example, an invoice on the last working day of each month.
- Payment terms. How many days the client has to pay after the invoice, such as 15 or 30 days. Shorter is better for you.
- Late payment. What happens if they pay late. Even a simple "work pauses after 15 days overdue" helps.
- Deposits for projects. For fixed-price work, ask for part of the fee up front.
- Currency and fees. The invoice currency and who covers transfer costs.
US clients often ask non-US contractors for IRS Form W-8BEN. The IRS describes it as the form a foreign person gives to the payer or withholding agent to certify foreign status for US tax withholding and reporting. Read the form's instructions before you sign it, and ask an adviser if a client wants anything else.
What to say
Keep it short and calm. A few lines that work:
- When asked for expectations early: "I'd like to understand the range for this role first. Could you share the band for my location?"
- When you have to give a number: "Based on similar roles, I'm looking for between 2,800 and 3,300 US dollars a month, depending on the full package." Use your own figures; these are only an example.
- When the offer is low: "Thank you. I'm keen on the role. Is there flexibility on base pay, or on other parts of the package, to get closer to my range?"
- When they say the band is fixed: "I understand. Could we agree a pay review at six months, based on agreed goals?"
Negotiate by email when you can. It gives you time to think, and it leaves a record. Then read the final contract and check the numbers match.
Beyond base pay
If the salary band is fixed, other parts of the package often aren't. Ask about:
- an equipment budget, or a laptop the company provides
- a monthly allowance for internet and power backup; see our guide on power and internet backup
- paid leave, and whose public holidays you'll follow
- health cover through the employer of record
- a learning budget for courses and certifications
- working hours that fit your time zone; see time zone overlap
- the notice period on both sides
Red flags in a pay offer
- You're asked to pay for training, equipment or a "starter kit" before you get paid. The US Federal Trade Commission says honest employers will never ask you to pay to get a job.
- The pay is far above the market for little work, with no interview.
- They want to pay you with a check and have you send part of it back.
- They refuse to put the rate, currency and payment terms in writing.
If you see these, stop. Our guide to remote job scams in Africa explains the common patterns.
