Best Way to Pay Contractors in Spain from the UK (GBP → EUR)

Most UK businesses overpay when sending regular GBP to EUR contractor payments. Here's the cheapest practical setup for paying freelancers and contractors in Spain.

Last updated: May 2026  ·  FXPathway independent analysis

If you need to pay contractors in Spain from the UK — whether freelancers, agencies, or remote employees — the way you send those payments can quietly cost you hundreds or even thousands per year.

Most UK businesses default to bank transfers or PayPal, but the real cost isn't the fee — it's the exchange rate margin. On regular GBP → EUR payments, that margin compounds every month.

This guide is for UK businesses, agencies, and freelancers making recurring payments to Spain — especially monthly contractor or remote-worker payments in GBP or EUR.

Why this is trickier than a one-off transfer

A single large transfer is relatively easy to optimise — you compare a few providers, pick the best rate, and move on. Regular monthly payments are different:

• The FX cost compounds every month
• Convenience often wins over cost, so defaults stick
• UK business banking often defaults to high-spread international transfers
• The cost is invisible — it never appears as a line item on your accounts

Should you pay contractors in GBP or EUR?

This is one of the most common questions for UK businesses working with contractors in Spain.

• Paying in EUR: your contractor receives a fixed amount and knows exactly what they'll get — but you take on the exchange rate risk.
• Paying in GBP: your cost is fixed, but the contractor's EUR amount fluctuates with the rate — which some contractors dislike.

In practice, most contractors prefer EUR for predictability — their local expenses and taxes in Spain are in euros, so a fixed EUR invoice simplifies their own bookkeeping. The key is not which currency you choose — it's using a provider with a low FX margin so the conversion cost stays minimal either way.

Typical payment methods and their issues

Figures are illustrative. Exact costs depend on provider, amount, and timing.

How to pay contractors in Spain from the UK

1. Agree invoice currency (GBP or EUR) with your contractor before the first payment.
2. Collect their IBAN and BIC/SWIFT code — Spanish IBANs start with ES, 24 characters total.
3. Choose a transfer provider — Wise Business for transparency, Revolut Business if you're within plan limits.
4. Check the GBP → EUR rate before sending — compare against the mid-market rate to see what you're actually paying.
5. Schedule payments on weekdays to avoid the small weekend markup both Wise and Revolut apply.

What actually drives the cost

Three variables determine what your contractor payments actually cost:

• FX spread: the gap between the mid-market rate and the rate you're given. This is the biggest cost for most businesses and the least visible.
• Transfer fee: the explicit charge per transfer. Usually smaller than the spread, but easier to spot.
• Frequency: monthly payments mean the spread cost multiplies 12 times per year per contractor.

Example: the real annual cost

Paying a Spanish contractor £3,000/month (approx. €3,500 at current rates):

These figures are illustrative. Always verify current fees and rates directly with providers.

Practical considerations for UK businesses

• Spanish contractors use IBAN: accounts start with ES. Make sure your payment method supports SEPA or SWIFT to Spanish IBANs.
• Invoice currency: agree with your contractor whether invoices are in GBP or EUR. This affects who carries the FX risk.
• Payment timing: both Wise and Revolut apply a small weekend markup. Scheduling payments on weekdays avoids this. See our full UK to Spain transfer guide for more on timing.
• Accounting records: specialist providers like Wise produce cleaner transfer records than bank SWIFT transfers, which can simplify bookkeeping.
• Volume discounts: if you're paying multiple contractors or making large transfers, some providers offer better rates at higher volumes — worth asking directly.

Frequently asked questions

What is the cheapest way to pay contractors in Spain from the UK?

For most businesses, a specialist provider like Wise Business is significantly cheaper than a UK bank for regular GBP to EUR payments. The main saving comes from the exchange rate — banks typically apply a 2–4% margin, while Wise charges around 0.5% with no hidden spread. On a £3,000 monthly payment, that difference can exceed £1,000 per year.

Do I need a business account to pay contractors in Spain?

Not necessarily — many sole traders and freelancers use personal accounts for contractor payments. However, using a dedicated business account (Wise Business, Revolut Business) can simplify bookkeeping, provide cleaner transfer records, and may offer better rates or higher limits for regular international payments.

What details do I need to pay a Spanish contractor?

You need the contractor's Spanish IBAN (starts with ES, 24 characters) and their bank's BIC/SWIFT code. Some providers also ask for the recipient's name and address. EUR payments to Spain typically route via SEPA, so the process is usually straightforward once you have the IBAN.

Should invoices be in GBP or EUR when paying Spanish contractors?

This is worth agreeing in advance with your contractor. Invoicing in EUR means your contractor knows exactly what they'll receive and you carry the FX risk. Invoicing in GBP means you know your cost but the contractor's EUR amount varies with the rate. Either approach works — the more important factor is using a low-margin provider for the conversion.

Related guides

How banks hide costs in the exchange rate →

Compare money transfer services: Wise vs Revolut vs TorFX →

Bank vs Wise transfer UK to Spain →

GBP → EUR transfer cost calculator →