Transferwise, Payoneer and PayPal – handling international freelance earnings

usd currency

Most of the money I’ll make this year wll be in USD. The system I freelance under currently only pays out via Paypal or Payoneer. Both of these carry fees for receiving cash.

With an international Paypal account, the transaction fee is 2% with a maximum of $20.00 USD per payment, or the foreign currency equivalent of $20.00 USD.

With a Payoneer account, the transaction fee is $3 fixed per transfer.

However, a US PayPal account just has a fixed transaction fee of 2%, which is capped at $1 per payment.

Therefore the desirable option was to set up a US PayPal account. This wasn’t without its struggles: luckily I had an ITIN, which allowed me to do this pretty seamlessly. For those without an ITIN, it is still possible to set up a basic US PayPal account to receive funds and direct them straight to your bank account upon receipt.

If you want to open a Transferwise Account, please do me a favour and let them know I refered you by using this link. Thank you!

Sarah Eaglesfield

Then from PayPal, I transfer the payments without any fees to my Wells Fargo account in the USA.

Then the question is, what is the most cost effective way to move USD money from Wells Fargo to GBP money in my bank account in the UK?


Transferwise fees on a $1K USD transfer to GBP

The fees for using Transferwise work out at slightly over $9 to transfer my USD balance to my GBP balance. They have good rates, and I particularly like their currency card management features, but they are not the best on the market for ongoing money management.


Payoneer’s fees depend on how you move the money around their accounts internally before doing a transfer. The fees for withdrawing a USD balance straight to a GBP bank account are 2% – so on a $1,000 balance, that’s $20.

Payoneer fees to withdraw direct from USD balance to GBP Balance

However, if I conver the money from USD to GBP in Payoneer, the fee is 0.5% of the total amount.

Then, if I withdraw GBP to my GBP account, the fee is a flat £1.50.

Therefore the cost of withdrawing $1K fron Payoneer is around $7. Or, it would be – but Payoneer don’t allow you to transfer to your home currency, whch ruins the process.

On the plus side, Payoneer’s currency conversion rate is 2% over the mid-market exchange rate. Obviously exchange rates constantly change, but it turns out that Transferwise has a very handy page to see what you will get from various currency exchange services.

Comparing them all

This was the exchange rate on the 2nd January 2020 and is not accurate as of this date

Transferwise haven’t included the Payoneer comparison here. However, as we know that the transfer fee is 2% and they exchange at 2% above the Mid-market exchange rate, (0.77598948 as of 2nd January) the amount you would receive with a Payoneer transfer would be £760.46 – putting them slightly ahead of the competitors. However, my Freelance company would need to pay me directly into Payoneer, as they do not accept payments from individuals.

I will keep investigating the best way to move money from USD to GBP. It may be that there are some trading platforms or similar where you could vastly reduce the fee. For now, I want to get the money out as quickly and simply as I can, so I’ll stick to Transferwise – but my choice may change in the future. It takes WellsFargo forever to send money, it’s not the instant transfers we’re used to in the UK. Scheduling to keep on top of cashflow is very important, and not something I want to spend too much time worrying about in the future.

Personal Financial Planning for the 2020s

To put it mildly, I’m in debt. I paid for a full refurbishment on my house this year, which is still underway – and getting hit with depression and having to take three months off work at the end of 2019 threw my credit score into chaos. I’ve applied for PIP and get other benefits whilst I’m not making an income – but I’m slowly establishing myself as a freelancer and hoping to follow that path going forward in 2020.

The first thing I will do is apply for the New Enterprise Allowance scheme. I’m currently not allowed to do that as I’m still signed off sick, but it will provide me with a helpful boost to establish my business. Then I have to make sure I am meeting the financial goals I set for myself every month.

I believe the way I plan my goals may prove helpful to others who have irregular income, so I’m sharing it here.

My blueprint for Personal Financial Planning in 2020

1. Work out your essential outgoings

First, there’s the essential outgoings:
Gas and electric: £170
Water: £30
Internet & telephone: £65
Mobile: £30
Repayments to debtors (repayment plan): £5
Website hosting: £20

Essential outgoings are £320 a month, or £3,840 a year.

2. Work out your non-essential but highly desirable outgoings

Then there’s the non-essential, but still useful outgoings for work and pleasure:
Car repayments: £440
Spotify: £5
Diesel: £25

Semi-essential outgoing are £470 a month, or £5,640 a year.

3. Work out your habitual spending and base lifestyle outgoings

I drink a lot of Red Bull and I smoke cigarettes. Neither of these are cheap habits, but they are very much a part of being me, for now. Let’s say I smoke 15,000 cigarettes and drink 2,200 cans of Red Bull a year. That’s 1,250 cigarettes a month and 183 cans of Red Bull a month.

I buy my cans of Red Bull in packs of 24 and I buy my cigarettes in packs of 200. So that’s roughly 8 packs of Red Bull and 6 cartons of cigarettes.

8 x Red Bull Sugar Free 24 pack on Amazon UK = between £18 and £23 = £144 to £184 a month

6 Cartons of Marlboro Lights = £660 a month

I can make huge savings on cigarettes by travelling to buy them, but let’s not work that into the equation for simplicity’s sake at this point.

Total habitual spending is around £840 a month, or £10,000 a year

4. Work out your minimal food spend a year.

I know for others it will be much less than this, but the minimum amount I need for food is £5 a day. That’s a meal deal at a supermarket, or an offer at a local bar. I don’t cook often at the moment as the kitchen isn’t finished, but I will be able to reduce that later in the year. For now, my minimal food spend is £5 day, which is approximately £150 a month.

Total minimal food spend £150 a month, or £1,800 a year.

5. Work out your actual food spend a year.

In reality, I survive on take outs at the moment, and my actual food spend is more in the region of £15 a day. The idea of this plan is to compare the reality of your spending to the actuals and ideals. Don’t by shy with this figure, food is as essential to live as heating and water, so budget it in.

Actual food spend a month is around £450 a month, or £5,500 a year.

6. Using the figures above, work out what you need to make for each scenario.

The Essential Bucket

To pay your bills and to survive on a bare minimum is Figure 1 + Figure 4. In my case, that’s £320 + £150 = £470 a month, or £5,640 a year. This is the amount of credit you want to make available to yourself at ALL TIMES throughout the year. By credit, I mean, cleared debt off credit cards that aren’t going to reduce your limit, overdraft availability – you want to make sure you have the means available to cover your bare minimal essentials as a priority going forward. What if you don’t have that amount available? That’s the amount you’re going to work to make available to yourself at the start of the year – it’s a bucket you can dip in and out of when you have guaranteed pay arriving but not at any other time.

The first £470 made in any month should go into the essential bucket. Anything extra after filling the The Life Bucket should go into The Essential Bucket until the bucket is full (£5,640) for the year.

The Desirable Bucket

This figure is the Essential Bucket + Figure 2. This will cover all your essentials plus the highly desirable outgoings. Sure, I could survive without a car, and I could certainly survive without Spotify, but they do add to my quality of life – and having a car saves me a lot of time on public transport, that I can spend working instead.

The Essential Bucket is £470 a month, and the highly desirable outgoins are a further £470 a month. The second £470 made in any month should go into the The Desirable Bucket, to ensure that you have the desirable things that make your life easier and give it quality. Therefore the first £940 I make in a month is accounted for and bucketed. It is only earnings above this I get to spend on habitual and “lazy” compromises.

The Life Bucket

My Life Bucket is Figure 1 + Figure 2 + Figure 3 + Figure 5. It’s the amount you need to earn to maintain the lifestyle you currently have. In my case that is £320 + £470 + £660 + £450 = £1,900 a month.

If I were to get a full time job not working from home, the salary I would need to meet My Life Bucket would be £30K. Add on £5K for the inconvenience and extra cost of travel. A job in that salary range would be easily in my reach, indeed, I tend to go for jobs that pay three times that amount – but the quest here is to work for myself, during hours I choose, and not to go back to the every day grind.

Therefore my initial aim is £1,900 a month, or in dollars $2,500 a month.

7. Work out how you’re going to fill the life bucket.

With a rough aim of $625 a week, I need to split this evenly through my businesses. I believe I can make $400 a week from freelance work, and will aim to make up the rest in sales through Amazon FBA and the other income streams I’ll be establishing throughout the year. It’s not going to be easy, but by focusing on a figure to get started, I can keep track of where I’m at. The ultimate aim, of course, is to make $100K this year, and if not this year, then the following year, etc. Ths guide to managing my finances in the meantime is a blueprint that I hope is easy enough for anyone to follow to manage their personal finances in the year to come.