W-9 or W-8BEN? When paying contractors requires a US tax form (and when it doesn't)
If your company pays freelancers and contractors, sooner or later someone asks: "do we need a W-9 for this person?" The answer is usually simpler than the forms make it look, and for many non-US companies the answer is neither. Here's the decision in plain language.
What the two forms are
- Form W-9 is how a US person gives a payer their taxpayer identification number. "US person" is an IRS term: US citizens, US tax residents, and US-registered entities. It's what lets the payer report the payments correctly (and avoid backup withholding).
- Form W-8BEN (W-8BEN-E for companies) is the mirror image: a non-US person certifies that they are foreign to a US payer, so that US withholding and reporting rules are applied, or correctly not applied, often at a reduced treaty rate.
One certifies "I am a US person"; the other certifies "I am not."
The decision, in three rules
1. Is the recipient a US person? → W-9. This follows the person, not their address. A US citizen living in Lisbon is still a US person and still files a W-9. Asking them for a W-8BEN because they "live abroad" is the single most common mistake in this area.
2. Are you a US company paying a non-US person? → W-8BEN / W-8BEN-E. As a US payer you need their foreign status on file to treat the payment correctly.
3. Are you a non-US company paying a non-US person? → generally neither. Absent a genuine US connection, US tax forms simply don't apply. Collecting W-8BENs from every contractor "to be safe" is pure friction; it protects nothing.
Two edge cases worth knowing: a W-8BEN doesn't last forever (it generally expires after three calendar years and must be refreshed), and work physically performed in the US can create US-source income even for a foreign recipient of a foreign company. If you know that's happening, ask for the form.
Why collect the form before the money moves
The forms are cheap to collect at onboarding and expensive to reconstruct afterwards. A missing W-9 can mean backup withholding you never applied; a missing W-8BEN can mean a US payer withheld nothing when it should have. Chasing a signed form from a contractor you paid eight months ago, who has no incentive to respond, rarely succeeds. The rule: no required form, no payment.
How this works in Kiip
Kiip's payout tool encodes exactly the logic above, so the right people are asked for the right form and nobody else is asked for anything:
- Every recipient makes a US-person declaration as part of onboarding their own profile.
- Recipients who declare themselves US persons are asked for a W-9, wherever they live.
- If your company is US-based, non-US recipients are asked for a W-8BEN.
- A non-US company paying non-US people collects no US forms at all, with no false-positive friction.
- W-8BEN expiry is tracked, and a payout to a recipient missing a required form is blocked before execution, with a one-click way to request the missing information.
You stay the payer and the party responsible for your own reporting; Kiip is the tool that guarantees the data exists when you need it. The forms live alongside every other payout document in your monthly archive.
This article is general information, not tax advice. US tax rules have real edge cases (treaty positions, US-source services, entity classifications), so confirm your situation with your advisor.
Paying contractors globally? See the full picture in How to pay people and companies anywhere in the world, or create your account at dashboard.kiip.app.