You hired a freelancer. The work is done, and now you need to pay them. If you have only ever dealt with payroll, this probably feels unfamiliar. There is no HR department processing it, no tax withholding, no direct deposit schedule. Paying a freelancer is a different process, but it is straightforward once you understand how it works.
Here is what you need to know.
How Freelancer Payment Actually Works
A freelancer is not an employee. They do not receive a salary or a paycheck on a set schedule. Instead, they invoice you for work completed, and you pay that invoice by the due date.
The basic flow looks like this:
- The freelancer sends you an invoice with a line-item breakdown, total amount, payment instructions, and a due date.
- You pay using the method specified on the invoice (bank transfer, card, or a payment link).
- There is no tax withholding on your end. The freelancer handles their own taxes.
That last point trips up a lot of first-time clients. When you pay an employee, you withhold income tax, Social Security, Medicare. With a freelancer, none of that applies. You pay the full invoice amount, and the freelancer is responsible for setting aside and paying their own taxes.
This is true in both the US and the EU. The freelancer is a business, and you are their client, not their employer.
Payment Methods: What Clients Typically Use
Most freelancers will specify their preferred payment method on the invoice. Here is what you are likely to encounter.
Bank transfer / ACH (US). The most common method for US-based payments. You send money directly from your bank account to theirs using their routing and account numbers. ACH transfers are free or nearly free, and typically settle within 1 to 3 business days. Most freelancers prefer this for domestic payments.
SEPA transfer (EU). The European equivalent of ACH. If you are paying a freelancer within the EU or EEA, SEPA is the standard. Transfers are free or low-cost, settle within one business day, and only require the freelancer's IBAN. This is the default for B2B payments across Europe.
Credit or debit card via Stripe or similar. Many freelancers use invoicing tools that include a "Pay Now" button linked to Stripe or a similar payment processor. This is the most convenient option for you as a client, since you can pay immediately with a card. The freelancer absorbs a small processing fee (typically 2.9% + $0.30 per transaction), which is why some prefer bank transfer for larger invoices.
PayPal. Still widely used, especially for international payments. The downside is fees. PayPal charges the freelancer around 3.5% on each transaction, plus currency conversion markups on cross-border payments. If you have a choice, bank transfer or card via Stripe is usually better for the freelancer.
Wire transfer / SWIFT. For larger international payments where SEPA is not an option (for example, paying a freelancer in the US from Europe, or vice versa). Wire transfers are reliable but come with higher fees, often $15 to $50 per transaction, and can take 2 to 5 business days. Reserve this for invoices above a few thousand dollars where other methods are not practical.
Payment Terms You Should Expect
Freelancers set their payment terms in their contracts and on their invoices. If you are new to working with freelancers, here is what is standard.
Net 14 or Net 30. This means the invoice is due within 14 or 30 days of the invoice date. Net 14 is increasingly common among freelancers, and for good reason: they are running a business with real expenses, and 30 days is a long time to wait for cash flow. If a freelancer asks for Net 14, that is a normal request, not an aggressive one.
Deposits. For project-based work (a new website, a brand identity, a video production), expect to pay 25 to 50% upfront before work begins. This is standard practice and protects both sides. The freelancer knows you are committed, and you know they are incentivized to deliver. The remaining balance is typically due on delivery or at agreed milestones.
Late payment fees. Most professional freelancers include a late fee clause in their contract, often 1 to 1.5% per month on the overdue balance. These are standard, enforceable, and exist because late payments are a widespread problem in freelance work. If you see a late fee on an invoice, it is not personal. It is business practice.
Tax Considerations for Clients
This is the part most clients worry about, but it is simpler than it seems.
US: 1099-NEC and W-9
If you pay a US-based freelancer $600 or more in a calendar year, you are required to file a 1099-NEC with the IRS. This form reports what you paid the freelancer so the IRS can verify they are reporting the income.
Before the first payment, ask the freelancer to fill out a W-9 form. This gives you their taxpayer identification number (either a Social Security number or an EIN) that you need for the 1099. Most professional freelancers will provide this without being asked, but it is your responsibility to collect it.
The 1099 deadline is January 31 of the following year. If you paid a freelancer $4,000 in 2026, you need to file the 1099-NEC and send the freelancer a copy by January 31, 2027.
Important: You do not withhold any tax from the payment. You pay the freelancer the full invoice amount. The 1099 is a reporting form, not a withholding mechanism.
International Freelancers
If you are a US company paying a freelancer outside the US, you generally do not need to file a 1099. The income was not earned by a US person, and it is not US-source income (in most cases). That said, keep records of what you paid, to whom, and when. Your accountant will thank you.
You may want to collect a W-8BEN form from international freelancers. This certifies their foreign status and can be relevant for certain types of payments.
EU: VAT Reverse Charge
If you are an EU-based business hiring a freelancer in another EU country, the VAT reverse charge mechanism likely applies. This means the freelancer does not charge you VAT on their invoice. Instead, you self-assess and report the VAT through your own tax return.
In practice, this means the freelancer's invoice will show a note like "VAT reverse charge applies, Article 196 EU VAT Directive" and the amount will not include VAT. You then account for the VAT in your own bookkeeping. If you are unfamiliar with this, your accountant or bookkeeper will know how to handle it.
For B2C transactions (you are not a registered business), the freelancer charges the VAT rate of their own country. But most client-freelancer relationships are B2B, so the reverse charge is the common scenario.
What to Watch For
Paying a freelancer is not complicated, but there are a few things that will make the relationship work better.
Agree on payment terms before work starts. Never ask a freelancer to begin work without a signed agreement that covers scope, rate, and payment terms. This protects you as much as it protects them. If something goes wrong mid-project, the contract is what you both fall back on.
Pay on time. This is the single most important thing you can do as a client. Late payments create cash flow problems for freelancers, damage the working relationship, and make it less likely that a good freelancer will prioritize your work in the future. If you cannot pay on time, communicate early. A freelancer who knows payment is coming next week is in a very different position from one wondering if they will be paid at all.
Use the payment method they specify. If their invoice includes a payment link or portal, use it. It is easier for both of you. The freelancer gets an automatic notification when you pay, and you get a receipt without any email back-and-forth.
Keep records. Save every invoice, every payment confirmation, and every contract. You will need these for your own taxes, and if you ever need to verify what you paid and when, you will be glad you kept them organized.
Do not surprise them with your own payment process. Some companies require freelancers to register as vendors, submit through procurement systems, or wait 60 to 90 days for payment. If your company has a process like this, tell the freelancer before they agree to work with you. Discovering a 90-day payment cycle after delivering the work is a fast way to lose a good freelancer.
Make Payments Simple With TAV
If your freelancer uses TAV, you get a client portal where you can review invoices, approve deliverables, and pay directly. Everything is in one place: the contract, the work, and the invoice. No email chains, no chasing PDFs, no wondering whether your payment went through.
You click "Pay," the freelancer gets notified, and the transaction is recorded for both of you. That is how paying a freelancer should work.