The global hiring landscape is changing fast. In the US alone, millions of independent contractors have become a key part of how companies work. As US businesses keep searching for specialized talent, they are hiring more workers beyond their own borders. Qualified professionals now sit in every corner of the world, working for American firms from their home countries. This brings fantastic opportunities—if you know how to stay compliant.
Getting international hiring right is about more than just bringing great people on board. Proper tax compliance is a non-negotiable step in international contracting. Non-citizens living outside the US are not taxed in the same way as US citizens or permanent residents. If you’re managing global payroll, you must know the difference.
For US employers, the Internal Revenue Service (IRS) has set out a clear process. The W-8 BEN form is at the core of it. In our experience at EWS Limited, companies frequently ask about W-8 BEN—when to use it, how to fill it out, and what happens if you miss a step. This article aims to answer these questions as simply as possible, so you can confidently manage foreign contractor onboarding without unexpected trouble.
According to data gathered by the IRS and payroll advisory reports, there were millions of independent contractors based in the US as of 2022, but the number of people working for US companies from abroad is also climbing each year. Some companies look to hire rare IT talent from Europe, South America, or Asia. Others want to engage creative or technical workers in countries with special expertise.
This global perspective brings with it a big responsibility: tax and legal compliance for international employers is different from hiring domestically. You need to understand the rules for paying non-citizens located outside the United States, or you risk penalties and complicated fixes later on. Part of getting this right is the IRS W-8 BEN form.
Compliance is not an option—it’s a requirement when hiring internationally.
The W-8 BEN is the official IRS form that foreign individuals use to certify they are not US persons for tax purposes. If you are hiring a contractor or consultant who is not a US citizen, does not hold a green card, and lives outside the US, this form matters for you.
The full name of the form is Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals). In short, it is like the international contractor’s version of the W-9—appropriate for people, not for companies or legal entities. The W-8 BEN helps the IRS determine the individual’s tax status and whether income paid to them must be taxed at the default 30% rate or qualifies for a lower withholding under a tax treaty.
According to IRS guidance, foreign workers provide W-8 BEN to their US-based client (the “withholding agent”), who then uses it to determine correct withholding and reporting. If the foreign contractor’s country of tax residence has an agreement with the US, the right details on the W-8 BEN can lower the tax withholding rate.
The main purposes are:
We regularly advise companies that even one missing form can mean unexpected 30% withholding, employee frustration, and a tangle of compliance headaches.
As per IRS guidance for beneficial owners, a company should ask for a W-8 BEN from a contractor if all the following apply:
If the contractor matches this description, the W-8 BEN is necessary. No form, no treaty benefits. That is a rule many have learned the hard way.
For anyone hiring globally, our advice at EWS Limited goes beyond paperwork. The W-8 BEN is the legal foundation for paying international workers correctly and avoiding penalties.
It is easy to get lost in tax form jargon. The IRS has several “W-8” forms. Here’s what each covers, but today, we focus on the W-8 BEN—for individuals:
Contractors who are individuals and do not operate through a foreign company almost always need the W-8 BEN. If you want help choosing the right forms for different contractor types, our guide on avoiding international contractor compliance pitfalls breaks down the steps.
Filling out the W-8 BEN has a reputation for being intimidating. But having walked through this process with hundreds of clients, we know it is manageable if you take it one line at a time.
Some practical tips we find helpfulOfficial IRS guidance on W-8 BEN instructions has additional details if you need to check unusual situations, but above are the basic requirements for most individuals.
When you hire a foreign contractor, they must return the completed, signed W-8 BEN to your company—not to the IRS directly. The employer (or the company paying them) is called the “withholding agent” and must keep the form on file. You’ll use the details to apply the right tax withholding rate.
If you do not have a completed W-8 BEN, the IRS requires you to withhold 30% of the contractor’s gross pay, even if treaty benefits could apply, as explained in IRS rules for nonresident aliens (Federal income tax withholding and reporting guidance).
The US employer or payer is always responsible. If you forget or lose the form, or the details are wrong, the IRS sees you—not the worker—as responsible.
Most employers wonder if they have to ask for a new W-8 BEN every year. The W-8 BEN form is valid until the last day of the third calendar year after it is signed. For example, if your contractor signed on March 15, 2023, it generally stays valid until December 31, 2026—unless their details change (like address or citizenship). If the contractor’s circumstances change before this time is up, they need to submit a new form right away.
Three years: that’s your window, unless something changes first.
We see this question all the time—what is the risk, really, if you miss a form? For both employers and contractors, there are several possible consequences:
Contractors often do not know a missing W-8 BEN can expose them to higher tax withholding, and companies underestimate how strict IRS rules are. For companies managing several international contractors at once, we strongly recommend a reliable tracking system for forms and deadlines—manual tracking is risky. For a detailed breakdown of compliance needs for international hiring, see our recent guide on what to check for international hiring in 2025.
How an employer of record (EOR) simplifies compliance and hiringWithout a local legal entity set up in the contractor’s country, many US companies have only one lawful way to hire global workers: Partnering with an Employer of Record (EOR). In our work at EWS Limited, we act as the local employer, taking care of onboarding, payroll, tax, and regulatory filings for you. The EOR collects and keeps required paperwork, including W-8 BEN forms, and stays on top of expiration deadlines and changes to local law.
This is not just a nice-to-have solution. EORs protect US firms by:
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