Pesky transfer fees

ninadepalma

Transferring money from country to country can get kind of tricky, depending on the countries. I have yet to work for any agencies, so I'm not really sure what their processes are like, but I just started working with yet another direct client who asked me to use PayPal. This client agreed instantly to my rates (I went out on a limb and asked for a bit higher than usual), and so I decided to ask if they would cover PayPal fees--and they said of course.

I've been working with my other clients for a while (since before I was doing freelancing full-time) and I didn't even think to ask about fees. Some have paid them without even mentioning it, and others have had me pay them without mentioning it. So I was wondering what the general consensus is: Do you ask clients to cover money-transfer fees? Do you work mostly with clients in the country where you live and not have to worry about that? How do agencies handle that? (I imagine agencies always cover fees?)

Dmitry

ninadepalma That's an excellent question @ninadepalma! In my case it all depends on the client. Sometimes they pay the transfer fees without hesitation and sometimes they want me to cover the fees. I always account for transfer fees when I'm working with agencies and they're built into my rate.

I'm not sure what's the best payment system is because I've been working with PayPal for so long, I don't even want to change it, but I've heard there are some better alternatives with lower rates.

What I recently did is developed a online portal for my clients where they can view their estimates and pay their invoices instantly by paying directly from PayPal or their Credit/Debit Card. That way there are no transfer fees because they're paying an invoice instead of sending money manually, plus it secure, fast and easy. Oh, and it also feels great when clients pay BEFORE the project starts.

But I guess this is possible only with direct clients. ?

Gaelle

ninadepalma When I was freelancing, I never used Paypal. The agencies would transfer the money directly into my bank account using money transfer platforms and all fees were paid by the clients. One company in the US used FTT Global for example. I guess if a client insists on using Paypal then they should pay the fees, but that's just my opinion.

izabelcka

If the client does not cover them, I simply expense them at the end of the year. ?

ninadepalma

izabelcka Do you mean deducting the fees from your taxable income? I didn't realize this was possible. I just looked it up, and it seems like it is possible in the US (where I live). Interesting!

ninadepalma

Dmitry Thanks for your response, Dmitry! How do you raise the question of fees to your clients?

Do the agencies you work for never cover fees? I've been aggressively writing to agencies and I'm hoping to get some ground-level experience with them, and I'd like to have an idea of what to expect...

Good to know that you have been using PayPal and you are comfortable with it! Your payment portal sounds awesome, too!

izabelcka

ninadepalma Exactly! Any expenses pertaining to my work... may it be Paypal fees, part of your internet bill, part of your rent/mortgage. Talk to your accountant! ? I learned a lot of stuff through him.

ninadepalma

Hmm, I have a few more questions now.

If your client pays your PayPal fees, do you include them in your invoice? Or is the client prompted to pay the fees upon completing payment?

ninadepalma

Gaelle Thanks for weighing in! I also am starting to think that the clients should pay the fees without question, but alas, that doesn't seem to always be the case. :-)