How to Get Paid as a Digital Nomad

Digital nomads are having a moment. Globally, 35 million workers identify as such, and 43% of them are self-employed.

If you’re considering packing your bag and laptop and spending some time living in another country, you’ve got a lot to think about. First, does the country offer a digital nomad visa? Some countries like Estonia have had their digital nomad visas available for several years, while others, like Italy, are just now coming onboard the digital nomad train.

Next, you’ll need to consider your work setup. To be a digital nomad, you’ve got to be able to work 100% remotely. Do you need equipment to do so? Maybe you'll need a video camera so you can attend virtual calls, or a Wi-Fi hotspot if you plan to live somewhere remote.

And then you’ll need to consider how you’ll get paid as a digital nomad and how to manage your finances and taxes. That’s what we’ll address in this article.

Money Management for Digital Nomads

Consider the Currency

If you have established clients in the United States, they likely pay you in dollars. Are you planning to continue to work with American clients or are you planning to make a more permanent move, which would mean you might seek clients in your new country?

Also, consider whether you will continue to have American expenses. I’m an expat living in Italy, but I’m still paying for my son’s college education in the States, and I still use an American credit card, so having dollars is still useful.

You might strike a balance between dollars and your new currency. I use Bill.com to invoice one client, and I set that up so that when they pay me, it converts to euros that are deposited into my Italian bank account. My other clients pay me in dollars through ACH.

Open the Right Account(s)

If you plan to stay long-term in your new country, you’ll want to open a local bank account. This makes it easy to pay your rent and utilities, as well as get cash out of an ATM without fees. And if, like me, you will continue to have American expenses, leave your American bank account open. Now you’ll need an account to connect the two.

Many expats and digital nomads use Wise. And while I have a Wise account that I rarely use, I prefer Revolut. I have two accounts there: one in dollars and one in euros. When I need to exchange money, I transfer dollars into my account from my American checking account; exchange my dollars for euros, minus a surprisingly low fee; and then transfer the euros to my Italian bank account. Gone are the days when your only option was a $25 wire transfer!

Keep the Right Credit Card

If you have an American credit card you’re reluctant to get rid of because it gives you rewards like cash back or travel points, check to see if there are foreign transaction fees, because they can really add up.

I use the Capital One Venture X card because it has great travel perks (allowing me to fly back to the U.S. to visit family without paying full price when I redeem points) and because there are no foreign transaction fees. I use the card for both American expenses and for Italian expenses.

Understand Your Tax Situation

You will need to find out what the requirements are for foreigners in the country you're in. In some countries, you also may be required to pay taxes locally, or at least file taxes. Some countries, like Italy where I am, have an agreement with the United States that prevents expats from being double taxed.

Your best bet is to find a local accountant who understands how to file taxes for foreigners, specifically Americans. Trust me: start your search for this magical individual early, because there aren’t a lot of financial professionals who understand our unique situation as digital nomads!

You also will still need to continue paying self-employment taxes in the United States for Medicare and Social Security. And if you still have ties to a state in the U.S., such as owning property there, you’ll have to file state taxes as well. You can use tax software to file your American taxes like you always have. When you start the filing process, the software will ask where you live, and you can indicate the country and when you moved there.

When it comes to Social Security, see what the agreement is between the United States and your new home. Here in Italy, I had to provide a certificate of coverage from the Social Security office to show that I’m paying into American Social Security and will receive it when I retire. Otherwise, I would have to pay the equivalent in Italy.

Get Your Finances in Order Before You Go

Figuring out how to get paid and manage your finances as a digital nomad isn’t overly complicated, but you will want to start thinking about these details before you uproot yourself from America!