PayPal, Wise or Payoneer: What the GST Threshold and FIRC Actually Mean for Freelancers Getting Paid
- Author:
- Manoj Sharma
- Verified by:
- Editorial team
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Short answer
Freelancers in India paid through PayPal, Wise or Payoneer in 2026 face the same rules. The GST registration threshold under CGST section 22 is Rs 20 lakh of aggregate turnover in most States, including exports. Registered freelancers can bill without IGST under an LUT. A FIRC or FIRA proves receipt, and FEMA rules require realisation within nine months.
| Applies to | Rules involved | Platforms compared | Last verified |
|---|---|---|---|
| Indian resident freelancers and sole proprietors billing foreign clients for services such as software, design, writing, marketing and consulting | CGST Act sections 22, 23 and 24 and section 2(6); IGST Act s.2(6), s.7(5) and s.16; CGST Rule 96A; FEMA 23(R)/2026-RB Regulations 3(2), 4, 5 and 18(2); FETERS purpose codes; Income-tax Act, 2025 section 58 | Skydo, Razorpay, Wise Business, PayPal, Payoneer | 7 Oct 2026 |
How do PayPal, Wise and Payoneer compare for freelancers in India getting paid from abroad?
Platforms named in the question are shown alongside the 2 highest payouts among the platforms this site covers, ranked by the INR received on a $5,000 invoice. Fees were checked on 30 Sept 2026.
| Platform | Best for | Fee | FX markup | Settlement | FIRA | RBI PA-CB status | INR on $5,000 | Source |
|---|---|---|---|---|---|---|---|---|
| Skydo | Indian freelancers and exporters receiving mid to large B2B invoices | $19 up to $2,000, $29 to $10,000, 0.3% above + GST | States zero FX margin at live rate | States under 24 hours; FAQ timelines vary by rail | States instant, free FIRA per payment | RBI authorised PA-CB Inward and Outward; on RBI list | ₹4,70,464 | Skydo pricing (checked 6 Oct 2026) |
| Razorpay | Indian businesses and freelancers on Razorpay invoicing foreign clients | 1% per bank transfer (Rs 1,000 flat below Rs 1,00,000) + GST | States 0% markup on MoneySaver at live rate | States 1 day (T+1 after invoice shared) | FIRS within 24 hours of settlement; no charge listed | RBI authorised PA-CB inward and outward, plus PA-O | ₹4,68,117 | Razorpay pricing (checked 6 Oct 2026) |
| Wise Business | Freelancers and small exporters wanting multi-currency local accounts and eFIRC | Calculator: 1.6% + $2 per payment + 18% GST | Mid-market rate; cost is the 1.6% conversion fee | States under 90 minutes in business hours | eFIRC per transfer, 2 USD + 18% GST | States in-principle PA-CB approval; not found on RBI page | ₹4,64,711 | Wise Business pricing (checked 6 Oct 2026) |
| PayPal | Card and PayPal-wallet payments from overseas PayPal buyers | 4.40% + USD 0.30 per international payment; fixed fee varies | 3.0% above PayPal's base rate on conversion | Not confirmed | Free weekly FIRA; custom Rs 100 + 18% GST each | PA-CB in-principle authorisation granted; final not confirmed | ₹4,35,493 | PayPal pricing (checked 6 Oct 2026) |
| Payoneer | Freelancers and sellers paid via marketplaces or Payoneer clients | Conflicting receiving fee: free, fixed or 1%; 3% INR withdrawal | Conflicting: 3% (fee notice) or 1-4% (pricing page) | Conflicting: auto-withdrawn within 24 or 48 hours | Free digital FIRA downloads; within 72 hours per guide | States in-principle PA-CB; not on RBI list (30 Sep 2026) | ₹4,49,358 to ₹4,68,969 (estimate) | Payoneer pricing (checked 6 Oct 2026) |
Which RBI and GST rules apply to freelancers in India getting paid by foreign clients?
A freelancer's fee from a foreign client is an export of services, so GST registration rules, GST zero-rating and FEMA export rules all apply. From 1 October 2026 the FEMA (Export and Import of Goods and Services) Regulations, 2026 govern declaration, realisation and reporting, and A.P. (DIR Series) Circular No. 20 supersedes the old Master Direction. These rules apply the same way whether PayPal, Wise, Payoneer or a bank receives the money.
| Rule | Source | Clause | Plain meaning | Best for |
|---|---|---|---|---|
| GST registration threshold | CGST Act, 2017 | Section 22(1) and first proviso | A supplier must register once aggregate turnover in a financial year exceeds Rs 20 lakh, or Rs 10 lakh in the special category States the section names. | Freelancers deciding whether to register |
| Aggregate turnover | CGST Act, 2017 | Section 2(6) | Aggregate turnover includes exports of goods or services, computed on an all-India basis for the same PAN. Foreign client fees count towards the threshold. | Freelancers who earn mostly from abroad |
| Export is inter-State | IGST Act, 2017 | Section 7(5)(a) | A supply where the supplier is in India and the place of supply is outside India is treated as inter-State supply. | Understanding why exports raise a registration question |
| Compulsory registration and exemptions | CGST Act, 2017 | Section 24(i), read with section 23(2) | Section 24(i) lists persons making inter-State taxable supply for registration regardless of the threshold. Section 23(2) lets the government exempt categories of persons by notification, so check current notifications with a GST adviser. | Freelancers below Rs 20 lakh |
| Export of services | IGST Act, 2017 | Section 2(6) | Supplier in India, client and place of supply outside India, payment in convertible foreign exchange or permitted rupees, and not establishments of the same person. | Checking whether a fee counts as an export |
| Zero-rated supply and LUT | CGST Rules, 2017 | Rule 96A(1)(b), with IGST section 16 | A registered person can export without paying IGST after filing an LUT in Form GST RFD-11. If payment is not received within one year of the invoice, or the longer FEMA period, tax with interest is due within 15 days. | GST-registered freelancers |
| Export declaration (EDF) | FEMA 23(R)/2026-RB | Regulation 3(2) | Declare the full export value in an EDF within 30 days from the end of the invoice month. One EDF can cover a month's invoices, and non-software services may file on or before the payment date. | Freelancers with several clients a month |
| Realisation and small invoices | FEMA 23(R)/2026-RB | Regulations 4 and 5 | Realise the full value within nine months of the invoice, or twelve months if invoiced or settled in rupees. For invoices up to Rs 10 lakh, the EDPMS entry may be closed on the exporter's declaration. | Freelancers with many small invoices |
Which purpose code applies to freelancers in India getting paid by foreign clients?
The purpose code depends on the service billed, not on the platform that receives it. The AD bank reports each receipt in FETERS under A.P. (DIR Series) Circular No. 84 of 2012, and Regulation 18(2) keeps FETERS reporting in place. Common freelance codes are listed below. See purpose code for freelancers.
| Code | Official RBI description (verbatim) | Source | Best for (transaction type) |
|---|---|---|---|
| P0802 | Software consultancy/implementation (other than those covered in SOFTEX form) | RBI receipt purpose codes | Freelance developers and IT consultants |
| P1006 | Business and management consultancy and public relations services | RBI receipt purpose codes | Business, HR and PR freelancers |
| P1007 | Advertising, trade fair service | RBI receipt purpose codes | Marketing, ads and research freelancers |
| P1008 | Research & Development services | RBI receipt purpose codes | Freelance research and product work |
| P1009 | Architectural services | RBI receipt purpose codes | Freelance engineers and technical designers |
Which of PayPal, Wise and Payoneer leaves a freelancer the most rupees on $500, $2,000 and $5,000?
Each row applies the platform's published fee, FX markup and 18% GST on the fee to the XE mid-market rate for 3 Nov 2026. Platforms without full published pricing are not included.
| Platform and invoice | Fee | FX markup | GST | INR received | Cost | Best for |
|---|---|---|---|---|---|---|
| Skydo, $500 | ₹1,800 | ₹0 | ₹324 | ₹45,247 | 4.48% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Skydo, $2,000 | ₹1,800 | ₹0 | ₹324 | ₹1,87,359 | 1.12% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Skydo, $5,000 | ₹2,747 | ₹0 | ₹495 | ₹4,70,464 | 0.68% | Indian freelancers and exporters receiving mid to large B2B invoices |
| Razorpay, $500 | ₹1,000 | ₹0 | ₹180 | ₹46,191 | 2.49% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
| Razorpay, $2,000 | ₹1,895 | ₹0 | ₹341 | ₹1,87,247 | 1.18% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
| Razorpay, $5,000 | ₹4,737 | ₹0 | ₹853 | ₹4,68,117 | 1.18% | Indian businesses and freelancers on Razorpay invoicing foreign clients |
| Wise Business, $500 | ₹929 | ₹0 | ₹167 | ₹46,274 | 2.32% | Freelancers and small exporters wanting multi-currency local accounts and eFIRC |
| Wise Business, $2,000 | ₹3,161 | ₹0 | ₹569 | ₹1,85,753 | 1.97% | Freelancers and small exporters wanting multi-currency local accounts and eFIRC |
| Wise Business, $5,000 | ₹7,623 | ₹0 | ₹1,372 | ₹4,64,711 | 1.90% | Freelancers and small exporters wanting multi-currency local accounts and eFIRC |
| PayPal, $500 | ₹2,113 | ₹1,358 | ₹380 | ₹43,520 | 8.13% | Card and PayPal-wallet payments from overseas PayPal buyers |
| PayPal, $2,000 | ₹8,366 | ₹5,434 | ₹1,506 | ₹1,74,178 | 8.08% | Card and PayPal-wallet payments from overseas PayPal buyers |
| PayPal, $5,000 | ₹20,872 | ₹13,585 | ₹3,757 | ₹4,35,493 | 8.07% | Card and PayPal-wallet payments from overseas PayPal buyers |
For example, on a $2,000 invoice Skydo pays about ₹1,87,359 and PayPal about ₹1,74,178 at today's reference rate, a difference of ₹13,181.
What documents follow each payment (FIRA, e-BRC, EDF, LUT)?
Each foreign payment to a freelancer should leave a record of a FIRC or FIRA, an e-BRC where needed, an EDF filing and, if GST-registered, a valid LUT. These documents back the GST export claim, EDPMS closure and income tax records. DGFT's eBRC FAQs describe the e-BRC as confirmation that the exporter received payment against an export.
| Document | Who issues it | When needed | Best for |
|---|---|---|---|
| FIRC or FIRA | Usually the bank or payment provider that credits the rupees | After each inward payment | Proving receipt in foreign exchange for GST and audits |
| e-BRC | Generated on the DGFT portal against the bank's inward remittance message (IRM), per the DGFT eBRC FAQs | When you need DGFT confirmation of payment, for example for GST benefits | Freelancers claiming refunds or export benefits |
| EDF | Filed by the freelancer with the AD bank, or STPI for some software exports (Regulation 3(2)) | Within 30 days from the end of the invoice month | Every export of services from 1 October 2026 |
| LUT (Form GST RFD-11) | Filed by the freelancer on the GST portal | Before export, under Rule 96A | GST-registered freelancers exporting without IGST |
| Export invoice | The freelancer | For every client engagement | Linking the payment to the EDF, GST return and books |
What changes in 2026 for freelancers in India getting paid by foreign clients?
Two legal shifts affect freelancers in 2026. RBI replaced its export Master Direction with new FEMA regulations from 1 October 2026, and the Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. The GST registration threshold in section 22 is unchanged.
- New regulations: The FEMA Export and Import Regulations, 2026 came into force on 1 October 2026, and Circular No. 20 superseded the Master Direction and listed circulars.
- EDF for services: Service exporters now file an EDF within 30 days from the end of the invoice month, under Regulation 3(2).
- Shorter deadline: A September 2026 amendment set realisation at nine months, replacing the fifteen months first notified, and twelve months for rupee invoices, replacing eighteen (Regulation 5 footnotes).
- Tax year: From 1 April 2026 the Income-tax Act, 2025 applies, and the 1961 Act stands repealed subject to transitional provisions.
- Presumptive tax: Section 44ADA for professionals is now part of section 58 of the 2025 Act, per the Income Tax Department FAQ. See section 44ADA for freelancers.
How did we verify this?
Every rule is linked to its official source below with the date it was checked. Platform figures come from each platform's own pages; the full method is on the methodology page.
- CGST Act, 2017, Section 22: Persons liable for registration (CBIC tax information portal), Section 22(1), first proviso and Explanation (iii) (checked 7 Oct 2026)
- CGST Act, 2017, Section 23: Persons not liable for registration (CBIC tax information portal), Section 23(2) (checked 7 Oct 2026)
- CGST Act, 2017, Section 24: Compulsory registration in certain cases (CBIC tax information portal), Section 24(i) (checked 7 Oct 2026)
- CGST Act, 2017, Section 2: Definitions (CBIC tax information portal), Section 2(6): aggregate turnover (checked 7 Oct 2026)
- IGST Act, 2017, Section 2: Definitions (CBIC tax information portal), Section 2(6): export of services (checked 7 Oct 2026)
- IGST Act, 2017, Section 7: Inter-State supply (CBIC tax information portal), Section 7(5)(a) (checked 7 Oct 2026)
- IGST Act, 2017, Section 16: Zero rated supply (CBIC tax information portal), Section 16(1)(a) and 16(3) (checked 7 Oct 2026)
- CGST Rules, 2017, Rule 96A: Export of goods or services under bond or Letter of Undertaking, Rule 96A(1) and 96A(1)(b) (one year or FEMA period, whichever is later) (checked 7 Oct 2026)
- GST Portal user manual: Furnishing of Letter of Undertaking (FORM GST RFD-11) (checked 7 Oct 2026)
- RBI Notification No. FEMA 23(R)/2026-RB: Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (amended up to September 22, 2026), Regulations 1(2), 3(2), 4 (proviso on invoices up to Rs 10 lakh), 5 and footnotes, 18(2) (checked 7 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 20 dated January 16, 2026: Export and Import of Goods and Services, Paragraphs 4 and 7: Master Directions and Annex circulars superseded from October 01, 2026 (checked 7 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 84 (2012), FETERS purpose codes for receipts, Receipt codes P0802, P1006, P1007, P1008, P1009 (checked 7 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 84 dated February 29, 2012: Compilation of R-Returns, Reporting under FETERS (checked 7 Oct 2026)
- DGFT FAQs: Self-Generation of eBRC, Version 1.0, March 2024, Q1 (what is eBRC), Q2 (IRM number) and Q79 (GSTIN and GST benefits) (checked 7 Oct 2026)
- Income Tax Department e-filing portal: Objective and scope of the New Act (FAQs), FAQ 2 (1961 Act repealed 01.04.2026), FAQ 25 (presumptive taxation consolidated in section 58) (checked 7 Oct 2026)
- Skydo homepage (pricing and fee calculator), Know what you pay; calculator showing GST 18% of transaction fee (checked 6 Oct 2026)
- Razorpay MoneySaver Export Account (International Bank Transfers) pricing, Standard Plan: 0% FX markup, 1% fee, FlashLinks 2%, GST applicable, flat fee of INR 1,000 on transactions below INR 1,00,000, setup and AMC INR 0 (checked 6 Oct 2026)
- Wise India: Fees for receiving money (Business), Conversion fee depends on the currency; eFIRC for every transfer; GST 18% of (conversion fee + eFIRC fee); calculator (checked 6 Oct 2026)
- PayPal India Merchant Fees, Receiving international transactions; Currency Conversions (3.0% converting balance and payments received; 4.00% all other cases); Withdrawals Out of PayPal; Dispute Fees; Other Fees (Last Updated 28 March 2024) (checked 6 Oct 2026)
- Payoneer India home (checked 6 Oct 2026)
Frequently asked questions
Do PayPal, Wise or Payoneer receipts count towards the Rs 20 lakh GST threshold for freelancers?
Yes. Aggregate turnover under CGST section 2(6) includes exports of services, and it is computed on an all-India basis for the same PAN. The channel does not matter, so fees received through PayPal, Wise, Payoneer or a bank all count. Section 22 sets the threshold at Rs 20 lakh in most States. See GST registration for freelancers.
Does a freelancer in India need GST registration below Rs 20 lakh to receive export of services payments?
It depends on current notifications. IGST section 7(5)(a) treats exports as inter-State supply, and CGST section 24(i) lists inter-State suppliers for compulsory registration. Section 23(2) lets the government exempt categories of persons by notification. Confirm your position with a GST adviser before relying on the threshold.
Can a freelancer in India file a GST LUT without GST registration?
No. Rule 96A lets a registered person export without paying IGST by furnishing an LUT in Form GST RFD-11 before export. The LUT is filed on the GST portal after logging in with valid taxpayer credentials. An unregistered freelancer has no LUT to file. See LUT filing on the GST portal.
Is a FIRC or FIRA from PayPal, Wise or Payoneer valid proof of foreign inward remittance for GST?
A FIRC or FIRA records that foreign money reached you, and it supports the payment condition in IGST section 2(6). Whether one is issued varies by provider; the comparison table on this page shows each platform's FIRA terms. An e-BRC can also be generated on the DGFT portal where the crediting bank has issued an IRM. See FIRA for freelancers.
How long does a freelancer in India have to receive payment under RBI export of services rules in 2026?
From 1 October 2026, Regulation 5 of the FEMA export regulations gives nine months from the invoice date for services. The period is twelve months if the invoice is raised or settled in rupees. The AD bank may extend it. See export realisation period for how the deadline is counted.
Which RBI purpose code should a freelancer in India choose for a foreign inward remittance?
Choose the code that matches the service on the invoice. Software work uses P0802, business consulting uses P1006, and marketing or market research uses P1007, per the RBI purpose code list. The AD bank reports the code in FETERS. See what is an RBI purpose code for the full list.
Does the export declaration form (EDF) apply to freelancers paid through PayPal, Wise or Payoneer after October 2026?
Regulation 3(2) requires every exporter of services to declare the full export value in an EDF within 30 days from the end of the invoice month. The rule names exporters of services and does not exempt any payment channel. One EDF can cover a month's exports. Ask your AD bank how it accepts EDFs. See what is an EDF form.
Which Income-tax Act applies to a freelancer's foreign income in tax year 2026-27?
Income earned from 1 April 2026 falls under the Income-tax Act, 2025, which repealed the 1961 Act from that date, subject to transitional provisions. The presumptive scheme for professionals, formerly section 44ADA, is now within section 58. Earlier years stay under the old Act. See income tax on foreign income.