The Best Way to Get Paid When You Teach English Online
** to avoid currency conversion fees + bank charges!
How do you get paid when you
teach ESL online?
When I started teaching English online, getting paid was a nightmare! I earned in Chinese RMB which was automatically converted into USD by my Online ESL School, and then once again changed to euro when it hit my Irish bank account.
Everyone was getting a chunk of my money and I was the one who was losing out. So I decided to find a way to cut down costs, and keep as much of my pay check as possible. I did lots of research and ended up saving myself approx $30 per month... and I want to share how it's possible for you to do the same.
If you want the quick answer, you can click the button below...
Lots of Online ESL Companies in China pay their teachers in Chinese Renminbi (RMB).
From this point on, I will refer to Chinese Renminbi as RMB.
For example, DADA ABC, a popular online ESL company, based in China, pays their teachers a base wage of 120 RMB per hour. Unless you are living in China, you won't be using RMB as your go-to currency. DADA ABC automatically converts your wage from RMB into USD - even if you're not American. This may cause some problems for those of us not from the land of the free, as our money undergoes two currency conversions before reaching our bank accounts. These currency conversion fees and bank charges add up and cause a considerable dent in your monthly wage.
Luckily we're living in a connected, globalised, and modern age where money can be sent overseas very cheaply and traditional brick and mortar banks no longer have us under their thumb.
Transferwise is a money transfer service, which allows people to send and receive money between countries without high bank fees.
I first came across them quite a few years back, but it never dawned on me that I could use their services to receive my wages every month. That was until I came across their "Borderless accounts". Despite not being from the United States, I was able to get a USD borderless account without any hassle. All it took was some personal details, a picture of my passport, and less than a one week wait for them to verify my identity. You can have a borderless account in over 30 currencies (including GBP, EUR & AUD) but for the purpose of this blog, and because online ESL schools often pay in USD, I will talk specifically about the USD borderless account from Transferwise.
They charge NO FEES to receive money into your account, and they're not one of those companies who pretend to have no fees but then jack up the exchange rate to compensate. You get offered the real interbank rate (cheapest possible) every time.
So how do they make their money?
They charge small fees for sending or converting money, but not for receiving.
How much of my teaching salary can I save?
A different exchange rate may not seem like a big deal, but let me go through a real life example and show you how much money I saved when I switched from being paid into my euro account via an international bank transfer to being paid into my US borderless account in USD.
It was only after I switched that I was fully able to comprehend how much I had been handing to the banks. Having being paid for the same month twice; once by Bank Transfer and once through Transferwise, I was in a great position to compare the two payment methods and do some analysis. This was March of 2018.
I worked 26 hours during March, earning 3120 RMB, which was worth $494 at the time. (The US dollar has since strengthened when I'm writing!)
I got paid $495.82 into my US borderless account and €388.96 via bank transfer, for the exact same work.
Bank Transfer in Euro:
Transferwise in USD:
The EUR/USD exchange rate back in March 2018 was 1.2374, meaning for every 1 euro you had, you could buy $1.23 USD. But, using this calculation gives us a different answer to what we see above. €388.96 multiplied by 1.2374 (EUR/USD exchange rate) = $481.29
I received only $481.29 into my Irish bank account instead of $495.82 meaning $14.53 had disappeared along the way.
The more money you earn, the more you lose to the banks.
Now $14.53 may not seem like a lot of money, but this is 2.57% of your total wages ], and it's going to banks and other financial institutions instead of into your pocket. I only worked 6.5 hours per week as I taught online with several different companies, but had I worked more hours, the financial loss would have been even more significant.
If you're wondering where I got that 2.57% figure from...
100% - [ Money received via bank transfer ($481.29)/ money received through Transferwise ($495.82) ]= 2.57%
Getting paid through Transferwise as opposed to a Bank Transfer saves you 2.57% of your total monthly wages.
Let's go through some examples:
Hours per week (16) x weeks in a month (4) x RMB per hour (120)x RMB.S/USD exchange rate in March 2018 (0.1583) = A monthly wage of $1215
Monthly wage ($1215) x percentage lost to banks (0.0257) = Money lost to banks ($31.22)
If you work 35 hours a week, teaching English online, you lose $68.34 of your wages every month to bank fees.
Try it yourself...
Fill in the dotted lines with your own information:
__ hours worked per month
___ RMB per hour
__.____ current RMB/USD exchange rate (you can find this on Google)
$ ____.___ per month
$ ___.__ (amount you spend in avoidable bank fees every month!)
What can you do with your money once it's in your Transferwise borderless account?
You have three options:
If you want to withdraw money from your borderless account to your euro bank account, there is a $4.50 fee per $1000 USD (0.045%). These fees are 0.0453% and 0.0473% for GBP and AUD, respectively. For USD, there's a fixed fee of $1.13 no matter how much you withdraw. If you want to calculate your fees or find out how much the fees are for other currencies, take a look at their price checker.
In order to withdraw money from ATMs using your Transferwise debit card, you must first convert your balance to your desired currency (ie Euro in Europe, GPB in the UK). You can withdraw from an ATM for free up to £200/$250 every 30 days and pay 2% thereafter. If you live in the United States, you will not incur any currency conversion fees.
Online purchases in USD with your debit card are completely fee free.
You can get a Transferwise borderless account with multiple currencies, so no matter what currency you earn in, you'll be paying the least amount of fees possible.
Want to avoid all these bank fees?
You can sign up* for a Transferwise borderless account by clicking the big purple button below.
**This is an affiliate link so I earn a little commission when you sign up through me, and you also get your first international transfer of up to £500 completely fee free.
How to get your ESL teaching company to pay you via Transferwise?
Simply send an email to your online teaching school and ask them to change your payment details. Provide them with the following list:
The name and the address of your bank are as follows:
19 W 24th Street,
Login to your Transferwise account, click on the Balances tab and then on your USD balance. Here you will find your account number, swift code, account holder name as well as the ACH routing number.
For your account holder name, you must include Transferwise FBO at the beginning. For example if your name is Sarah Jones, then your account name would be Transferwise FBO Sarah Jones.
About the author:
Laura is the founder of Online English Teacher, an ESL recruitment and training company which helps people to start teaching English Online. They have a free job placement service, providing online teaching positions for hundreds of people every month. They also offer interview preparation calls and demo lesson practice sessions, ensuring that their customers become confident and well prepared online teachers. If you're interested in teaching English Online, learn more here.
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