Your options for getting paid
There is no single best method. The right choice depends on your client's country, how often you invoice and the size of each payment. Fee schedules change, so check the current published rates for each provider before you commit.
| Method | Works well for | What to watch |
|---|---|---|
| International bank wire (SWIFT) | Large, occasional payments | Fees on both ends, intermediary bank charges and a bank exchange margin |
| Multi-currency payment services such as Wise | Regular payments in common currencies | Transfer fee plus exchange rate, limits by currency and account type |
| PayPal | Clients who already use it | Fees for receiving and converting, and holds or disputes |
| Stripe or invoicing platforms | Card payments and recurring clients | Processing fees, payout timing and currency conversion on payout |
| Local receiving accounts | Clients who prefer to pay a local account | Account fees and whether the details are in your name or your business's |
Understand the real cost
The headline transfer fee is only part of the cost. The exchange rate you receive is often the larger part. A provider may advertise "no fee" and then convert at a rate with a margin built in. To compare, convert a sample amount and check what lands in your Canadian account against the mid-market rate on the same day. Also account for fees the sender pays, since some clients will reduce the amount to cover them.
Payon is working on a freelancer payments service for this problem. See our freelancer payments page and our international payments page for what is currently available.
How to choose a method
- List your clients by country and currency, and note how often each pays.
- Test a small real payment with each candidate method before you rely on it.
- Check how long funds take to arrive, since cash flow matters as much as fees.
- Make sure the account is in the right name, personal or business, so your records match your tax filing.
- Keep a backup method in case an account is limited or a transfer is held for review.
Invoicing in a foreign currency
You can invoice in the client's currency, in Canadian dollars or in a third currency such as US dollars. Invoicing in your client's currency is convenient for them, but you carry the exchange rate risk between the invoice date and the payment date. Invoicing in Canadian dollars moves that risk to the client. Whichever you choose:
- state the currency clearly on every invoice
- set payment terms and the due date
- say who pays bank and platform fees
- include your GST/HST number if you are registered
GST/HST on services to clients abroad
Services supplied to a non-resident who is not registered for GST/HST are generally zero-rated. That includes many advisory, professional, consulting and electronically delivered services. Zero-rated means you charge 0% GST/HST, but the sale is still a taxable supply. Three things follow:
- You can still claim input tax credits on the related expenses if you are registered.
- Zero-rated sales count toward the $30,000 small supplier threshold. See our HST/GST registration guide.
- Zero-rating has exceptions, including services to individuals who are physically in Canada, services related to Canadian real property and services tied to tangible property ordinarily located in Canada.
If your client is a Canadian business or a person in Canada, the rate is usually the normal GST/HST for the client's province. Confirm each case before you leave tax off an invoice. The CRA explains the rules in its guidance on exports and imports.
Reporting foreign income to the CRA
Income from foreign clients is taxable in Canada like any other business income, whether or not the money comes through a Canadian bank. Convert each amount to Canadian dollars using the exchange rate on the day of the transaction. For many small transactions, the CRA may accept an average of Bank of Canada rates, such as an annual average, if you apply it consistently.
Self-employed filing dates
If you are a sole proprietor with a December 31 year-end, your tax payment is due April 30 and your return is due June 15. As a self-employed person you pay both the employee and employer halves of CPP.
Foreign property reporting
You must file Form T1135 if the total cost of your specified foreign property is more than $100,000 CAD at any time in the year. Bank accounts held outside Canada can count. If the cost is $250,000 or more, you use the detailed reporting method. Penalties for missing T1135 can be significant, so speak with an accountant if you hold a foreign account. See the CRA's foreign income verification statement page.
Keep clean records
- invoices and contracts for every foreign client
- bank or platform statements showing the amount received and the date
- the exchange rate you used for each conversion, with the source
- receipts for related expenses, such as software and equipment
- any tax forms a foreign client asked you to complete
Keep records for at least six years. Separate business and personal accounts to make year-end easier. Our accounting and tax team can set up bookkeeping for foreign-currency income, or you can contact us with questions.