If you`re working with a Canadian contractor, you`ll need to know how to pay them. Whether you`re hiring a freelancer or a small business, there are a few things you need to consider before making a payment.

Here`s a step-by-step guide on how to pay a Canadian contractor.

Step 1: Determine the Payment Method

The first step is to determine the payment method. There are several options available, including:

– Electronic Fund Transfer (EFT): An EFT is a secure way to transfer funds directly from your bank account to the contractor`s account.

– Wire Transfer: A wire transfer is a transfer of funds from one bank account to another.

– PayPal: PayPal is a secure online payment method that allows you to pay contractors in Canada and around the world.

– Cheque: You can also send a cheque to the contractor`s business address.

Step 2: Get the Contractor`s Information

Before making a payment, you`ll need to get the contractor`s information. This includes their name, business name, mailing address, and email address.

Step 3: Get an Invoice

Ask the contractor to provide an invoice that includes the amount owed, the payment due date, and the method of payment. Make sure the invoice includes the contractor`s business information, including their business number and GST/HST number, if applicable.

Step 4: Verify the Contractor`s Business Number

Verify the contractor`s business number by checking the Canadian government`s online database. This will confirm that the contractor is registered to collect GST/HST.

Step 5: Make the Payment

Once you`ve verified the contractor`s information, it`s time to make the payment. If you`re using an electronic payment method, make sure you have the contractor`s bank account information. If you`re sending a cheque, make sure you have the correct mailing address.

Step 6: Keep Records

Keep a record of the payment by saving the invoice and any receipts or confirmation numbers. This will help you keep track of your transactions and make tax time easier.

In conclusion, paying a Canadian contractor is a simple process if you follow these steps. Make sure you have the contractor`s information, verify their business number, and choose a secure payment method. By keeping good records, you can ensure that your payments are accurate and on time.