What to Consider When Working With International Clients When You Are Freelancing
If you’re a freelancer in the US, working with international clients can be a good way to expand your portfolio and earn extra money, but it can also come with some unexpected costs.
Using different time zones may mean you are working at unusual times.
First cost? Your dream. As The Freelancer reminds us, working with a client in a significantly different time zone can lead to late nights or very early mornings:
The client sends you an email asking you to arrange a call at 13:00. Sounds great, you think. “I’ll have time to eat and then come back to him.” You compose a confirmation email but stop halfway remembering this customer is in India. You’re in New York, where 1:00 pm for them actually, uh, google … 3:30 for you. Not good.
The freelancer offers to be clear about your boundaries and availability – that is, letting you know in advance what hours you usually work and what you don’t – but admits that sometimes you will have to sacrifice a night’s sleep if you want to leave these international gigs.
It’s the same with remote freelancers who want to work while traveling the world. If you are out of sync with the people who pay you, you will have to make sacrifices.
Getting paid can cost you money
When you do get paid, you may face additional fees. Write Life has a good list of the various payment methods available – PayPal, wire transfers, international bank accounts – but it notes that you may still have to pay a few extra dollars to access your hard-earned dollars. …
When you get paid online for international services, you must understand that you will be paying additional fees when compared to working with a local client.
These fees are tax deductible, but if you’re currently capping pennies, you might be better off looking for domestic customers with a more streamlined billing system. (Direct deposit is my favorite payment method, no doubt about it.)
Your taxes can get complicated
About taxes: When you work with international clients, you need to be very vigilant about your tax obligations. As The Freelancer explains, these international clients may not be sending you 1099s, but that doesn’t mean you are not responsible for an accurate statement of the income you have earned:
If you are based in the US, your international client may not provide 1099s. This is just a US tax regulation. In this case, you must still verify your annual income with your client to make sure your records match and your tax information is correct.
If you are a US freelancer and make money from international clients while working outside of the US, things get even more complicated. The IRS has a calculator to help you determine if your job is eligible for an overseas earned income exclusion (i.e., whether income earned in another country can be excluded from your tax return), but you can go further and hire a CPA. to help you file your tax return, just to make sure you don’t make any unintended mistakes.
Overall, you can make less money per hour.
Finally, you will want to make sure that your international work is paid at the same hourly rate as your homework, all factors considered. In other words, if an international client and a local client pay the same rate, but the projects you do for an international client come with a ton of extra fees and tax hassle, that client may not be the best use of your time.
Payoneer has a good guide to help you decide if working with international customers is worth it:
Taking into account the additional costs of overseas activities, you can set your rates in accordance with what you earn domestically from projects. However, think about the time value of money. If language, communication, and other obstacles slow you down a lot, you may not be earning enough with a particular client to keep working. If this is the case, adjust your rates accordingly or inform them politely and honestly that you need to stop serving.
Freelancers who have worked with international clients – what is your advice? Is building an international portfolio a good way to develop your freelance career, or should freelancers from the US try to work with US clients?