The formula
Per-payment cost = Flat fee + Amount × (%Fee + FX margin) ÷ 100
The flat fee dominates small payments and vanishes into large ones: $10 is 2% of a $500 payment and 0.1% of a $10,000 payment. This is why payment frequency is a real economic decision — twelve monthly payments carry twelve flat fees and twelve conversions, versus four quarterly ones.
The contractor-receives line subtracts only the FX margin (fees are assumed on the payer). If your arrangement deducts fees from the contractor, subtract the full cost — and expect the contractor to reprice accordingly.
How to use this calculator
- 1
Enter the payment and frequency
The invoice amount and how many times a year you pay this contractor.
- 2
Add your provider’s pricing
Flat fee, percentage fee, and FX margin if the contractor is paid in another currency.
- 3
Check what the contractor nets
Confirm it matches what they expect — misalignment here is the root of most contractor payment disputes.
- 4
Review the annual line
Multiply across your contractor bench to see the payout budget, then test frequency and rail alternatives.
Who bears the fees — the clause worth writing down
There are three clean conventions: payer bears everything (contractor receives the invoice amount exactly), receiver bears everything (you send the invoice amount, deductions land on the contractor), or split by nature (payer bears sending fees, receiver bears their own bank’s receiving fees). Any of the three works when written into the engagement; none works when assumed.
The payer-bears-all convention is cleanest for retention: the contractor’s number is stable every cycle, which is most of what contractors want from payment terms. Price it deliberately — this calculator gives you the exact cost of generosity, which is usually smaller than the friction it removes.
Rails and currency: the two levers on contractor economics
Rail choice moves both cost and experience. International wires to a local bank account carry the full correspondent stack and arrive net of deductions; local-rail delivery (domestic credit or mobile money in the contractor’s market) arrives whole and typically prices lower per payment. For African contractors, mobile-money delivery is often the difference between same-week and same-day receipt.
Currency choice is the quieter lever: contractors invoicing in USD to be "safe" often lose twice — once on your conversion to USD, once on their bank’s conversion to local currency at an unmeasured rate. Paying directly in the contractor’s currency at a quoted rate collapses two conversions into one you can see. KeyBS Pay quotes both patterns; compare them per contractor.
Common use cases
Engagement pricing
Set contractor terms with payout costs priced in, so margins survive the payment leg.
Frequency optimisation
Compare monthly versus quarterly cycles on flat-fee drag and conversion count.
Bench budgeting
Annualise payout costs across all contractors for the operating budget.
Rail comparison
Price wire versus local-rail delivery for the same contractor and let the numbers pick.
Automate this with the API
Quote a single contractor payout into a local currency in one call.
curl "https://keybs.io/api/v1/tools/quote/live?from=USD&to=GHS&amount=2500" \ -H "x-api-key: YOUR_FREE_KEY"Free Tools API docs and key registration
Frequently asked questions
Why did my contractor receive less than I sent?
Correspondent deductions en route (common on SWIFT wires under SHA charging) and receiving-bank fees. Local-rail delivery avoids the correspondent stack. If exact receipt matters, use a quote-first route with a committed receive amount.
Should I pay in USD or the contractor’s local currency?
Usually local currency at a disclosed rate — USD invoices to non-USD contractors typically trigger a second, unmeasured conversion at the contractor’s bank. One visible conversion beats two, one of them invisible. Ask the contractor to quote in local currency and compare.
How do platforms price contractor payouts?
Structures vary: flat per payout, percentage, FX margin, or combinations. Enter each candidate’s structure into this calculator against your real amounts — the effective cost rate comparison usually makes the decision obvious.
Are there compliance considerations in contractor payouts?
Yes — contractor classification, tax reporting obligations by jurisdiction, and standard KYC on recipients. Keep engagement agreements and invoices aligned with payments; platforms with per-payment documentation make year-end reporting materially easier.
What frequency is most cost-efficient?
Fewer, larger payments carry less flat-fee and conversion drag — but contractor cash-flow needs and engagement norms push monthly. The calculator quantifies the trade: if quarterly saves $120 a year per contractor, decide whether that covers the relationship cost of slower cycles.
Can KeyBS Pay pay contractors across Africa and beyond?
Yes — quote-first payouts to bank and mobile-money endpoints across African markets and to major global corridors, route-dependent. Fees from 1.5% disclosed on the quote with the receive amount committed, so the contractor’s number is agreed before the money moves.
Corridors, tools and reading for this calculator
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