Salary from the USA - cheapest way to get it

[Mydogisagentleman]

My DH is self employed, by a company based in the States.
Every month, he loses a certain amount (or gains) according to the exchange rate.
My question is how can we reduce the cost.

So he has a client in the US who pays him in USD?

It’s unlikely that they will want to take the currency risk and pay you in sterling. It’s also unlikely that any sort of hedging arrangement is going to be worth your while unless he’s pulling in a ton of dollars each month. So I think that you’re just going to have to swallow the exchange risk.

He might get a better rate or lower net charges if he could wait until he transfers larger amounts. Means going without his income for a while, though. There are also certain times of year when the $ tends (historically) to surge against other currencies. You'd have to research when.

I used to use Transferwise to move the money from a US account.

Arrange for him to be paid in GBP instead? It should be fairly simple for a company to arrange for a bank transfer for a set amount of sterling and they will pick up the difference in exchange rates. Given the volatility of exchange rates, your DH is taking a big risk. It's all well and good now that exchange rates are more in his favour, but if they go back up towards the 1 pound/$2 mark he will be taking a financial hit.

We use Transferawise too.

I hope he is paying his NIC credits otherwise all the years with US money coming in will show as a blank for UK pension.

World First is a good company. They have an office in NYC so you can sell $ and buy £ and only have to do wire to the NY bank which has cheaper fees.

metro bank are some of the lowest for maintaining a usa dollar account
www.metrobankonline.co.uk/business/current-accounts/products/foreign-currency/

Given the volatility of exchange rates, your DH is taking a big risk

Good job he isn’t being paid in Argentinian Pesos, eh? That’s a much bigger risk than USD/GBP rate fluctuations.

Why would the OP’s DH’s client (the entity paying him is not his employer: see below) choose to take the currency risk, instead of him? What’s in it for them? I wouldn’t pay a supplier in a different currency, with the associated hassle and FX risk, just because it was convenient for them.

Also, OP, you do get that because your husband is self-employed, what he’s receiving from the US isn’t salary, right? It’s a payment from a customer. I’m with PlandeRaccordement on the NICs. That’s the real risk!

@Iamthewombat

Given the volatility of exchange rates, your DH is taking a big risk

Good job he isn’t being paid in Argentinian Pesos, eh? That’s a much bigger risk than USD/GBP rate fluctuations.

Why would the OP’s DH’s client (the entity paying him is not his employer: see below) choose to take the currency risk, instead of him? What’s in it for them? I wouldn’t pay a supplier in a different currency, with the associated hassle and FX risk, just because it was convenient for them.

Also, OP, you do get that because your husband is self-employed, what he’s receiving from the US isn’t salary, right? It’s a payment from a customer. I’m with PlandeRaccordement on the NICs. That’s the real risk!

Why get snarky with me? I did read the OP

I gave an alternative, and the GBP/USD exchange rate was all over the place in 2020. Not great if you need to fix your income. Shall I next suggest that the DH tries to get a forward exchange contract set up?

I use TransferWise as well to transfer my GBP child maintenance monthly to my USD. Lose barely any funds. If you can hold onto it for a while and time the market for when the pound is lower and the dollar is stronger it's helpful too. I just leave my account alone when the pound is weak but I don't depend on that money so I can wait.

We used HSBC when we had UK/CAD money going backwards and forwards. Can't remember the logic now but I think it was the lowest 'easy to use' option.

Why get snarky with me? I did read the OP

Call it snarky if you like. You suggested something ridiculous. You opined that the OP’s husband was ‘taking a big risk’ then suggested that his client took on this big risk for him. Because clients are falling over themselves to take on their suppliers’ big risks for them, aren’t they?

It’s the lack of basic logic.

I gave an alternative, and the GBP/USD exchange rate was all over the place in 2020. Not great if you need to fix your income.

Agreed, but why should the client in the US mitigate that risk for him? For the DH currency fluctuations are part of the overall risks and rewards of being self-employed and providing services to clients in a different country.

Which state is the company in? He may have to file a State income tax return depending on the State. Some States require nonresident foreign persons who have income from that state to pay state income taxes.

Also, I hope he knows he has to file US Income taxes as well as a nonresident alien with income from the US, using Form 1040-R

“Taxation of Nonresident Alien Income
Nonresident aliens are required to pay income tax only on income that is earned in the U.S. or earned from a U.S. source.2 They do not have to pay tax on foreign-earned income.”

We wait til the exchange rate is most favorable and transfer large chunks, probably several months of expenses. I know not everyone is in a position to do that.

He does pay tax and NI contributions in the UK, I will ask him about paying in the states

It's a think to look out for when you are agreeing the contracts upfront. If the US company needs your services enough, you can specify that you are paid in pounds Sterling.

They are not likely to agree if a similar service offering is available elsewhere.

I will ask him about paying in the states I would
Make this a priority And make sure he’s actually consulted an expert, not a random on the internet. The IRS do not fuck around.