Fees & charge types: What Indian Freelancers Must Know

Key takeaways

Understanding the Basic Terms

What Is a Lifting Fee?

A lifting fee is what your Indian bank charges to release foreign currency from its nostro or correspondent account and credit it to your rupee account. Most Indian banks levy this as an inward remittance processing fee, typically ₹200 to ₹1,000 per transaction. You’ll often see it as “inward remittance charges” or “processing fee” when funds arrive.

The confusing part? It gets auto-deducted. If a client sends $1,000 and your bank applies a ₹500 lifting fee plus ₹300 beneficiary processing fee, you receive less than the full amount after conversion.

What Are Correspondent Charges?

Correspondent charges happen earlier in the journey, before money reaches India. SWIFT wires rarely travel directly, they hop through intermediary banks. Each intermediary may deduct $10 to $30, so a two-hop route can shave $20 to $60 off what you receive. For a clear breakdown, see this SWIFT fee breakdown in India.

These fees are often invisible. A client initiates $2,000, it arrives as $1,950 or $1,970, and you only discover the short credit at the end.

Intermediary Bank Charges Explained

Intermediary bank charges is the umbrella term for all deductions between your client’s bank and yours, including correspondent charges and sometimes the lifting fee at destination. For a primer on the network, see what are intermediary banks and how do they work.

How International Payments Actually Travel

When a US client wires money, the chain typically looks like this: Client’s bank → Correspondent bank 1 → Correspondent bank 2 → Your Indian bank → Your account.

At each stage, deductions can occur:

• Stage 1: Client’s bank charges $25 to $50, paid by the sender.
• Stage 2: First correspondent bank deducts $10 to $30.
• Stage 3: Second correspondent bank deducts $10 to $30.
• Stage 4: Your Indian bank applies ₹200 to ₹1,000 as lifting fee plus ₹200 to ₹300 beneficiary charges.

By the end, a $2,000 invoice may net only $1,950 to $1,970 worth of rupees. See the full SWIFT fee breakdown in India for examples.

Hops depend on bank relationships. A major US bank with a direct corridor to your Indian bank may only have one intermediary, smaller banks often require multiple hops.

Breaking Down Lifting Fee vs Correspondent Charges

Scope and Location: Lifting fee is applied by your Indian receiving bank at the final stage, correspondent charges are deducted mid-route by intermediary banks outside India.

Timing and Visibility: Lifting fees usually appear on your statement as a line item. Correspondent charges are hidden, you only see a short credit upon arrival.

Typical Amounts: Lifting fees are relatively predictable, often ₹200 to ₹1,000, with examples like HSBC India’s inward remittance charges. Correspondent charges vary by route, $10 to $30 per intermediary bank, see wire transfer charges from USA to India.

Combined Impact: Under SHA, you bear both correspondent charges and lifting fees. On $2,000, losing $30 to intermediaries plus ₹700 to receiving fees leaves roughly $1,962. Details here: SWIFT fee breakdown in India.

Who Pays: Understanding OUR, SHA, and BEN Codes

SWIFT uses three charge codes in field 71A of the MT103. For a quick overview, see fee split BEN, SHA, OUR.

OUR: Sender Pays All

Under OUR, the sender agrees to pay all charges, including the sender’s bank fee, correspondent charges, and theoretically the receiving bank’s fees. In practice, some intermediary banks still deduct en route, and some Indian banks apply lifting fees that are later reimbursed. Example schedules at HSBC remittance fees and charges.

Best practice: Confirm with the sender’s bank that they will gross up to cover all intermediary and receiving fees, and get written confirmation that you will receive the full invoice amount.

SHA: Shared (Most Common)

Under SHA, the sender pays their bank’s fee, you pay the rest. This is where freelancers lose the most, often 3–5%. See examples in the SWIFT fee breakdown in India.

BEN: Beneficiary Pays All (Avoid This)

Under BEN, you pay everything, including the sender’s bank fee, all correspondent charges, and your bank’s fees. Avoid BEN entirely.

What to Request

Ask clients to use OUR, verify execution, or, if OUR is costly, accept SHA but add a 2–3% “Bank charges” line item to cover expected deductions.

Real Numbers: What a $1,000 Transfer Actually Costs

Typical SHA scenario:

• Sender side: Outgoing wire fee $25 to $50.
• Transit: Two correspondent banks deduct $15 each, total $30.
• Arrival in India: Lifting fee ₹500, beneficiary fee ₹250, total ₹750, roughly $9.

Your net: $1,000 minus $30 minus $9 ≈ $961. Add FX markup, and your INR drops further. A worked example appears in the SWIFT fee breakdown in India.

The takeaway: Using traditional SWIFT under SHA, you can easily lose 3–5% to various fees and FX markups on a $1,000 invoice.

How to Minimize or Avoid These Charges

Request OUR Charge Code

Make OUR standard. Add invoice notes: “Sender covers all intermediary bank charges and lifting fees.” Confirm with the sender’s bank before they initiate. See typical handling at HSBC remittance fees and charges.

Use Local Payment Rails Instead of SWIFT

Provide clients local account details to receive via ACH, SEPA, or FPS. This avoids intermediary banks entirely. A detailed comparison appears in the SWIFT fee breakdown in India.

Example: Karbon Business offers virtual USD, GBP, EUR, CAD accounts with domestic transfers, charging a transparent 1% platform fee, zero FX markup, and automatic e-FIRA.

Other alternatives include Wise Business, Payoneer, and RazorpayX International.

Bundle Smaller Payments

Consolidate multiple small invoices into one larger transfer to reduce fixed-fee impact. More guidance in the SWIFT fee breakdown in India.

Add Clear Payment Instructions to Invoices

Ambiguity costs money. Include:

• Payment method: “Bank transfer, OUR charge code.”
• Charge responsibility: “Sender covers all fees, no deductions.”
• Confirmation: “Provide MT103 after sending.”
• Exact beneficiary details: legal name, account number, SWIFT, bank, branch.

Even small errors can trigger re-routing and extra charges. Reference guide: international bank transfer fees for freelancers in India.

Choose Optimized Payment Routes

Suggest clients use major banks with strong corridors to India, reducing hops and fees. See routing tips in the SWIFT fee breakdown in India.

Verify All Account Details Are Exact

Double-check legal name, account number, SWIFT, bank name, branch address, and purpose code, to avoid rerouting charges and delays. Guidance here: international bank transfer fees for freelancers in India.

Use Platforms with Virtual Local Accounts

Receive domestically via local rails, then settle to INR with transparent platform fees. This removes correspondent banks from the equation. More context in the SWIFT fee breakdown in India.

Example: Karbon Business offers local USD, GBP, EUR, CAD details, 24 to 48 hour INR settlement, flat 1% fee, zero FX markup, and automatic e-FIRA.

Reconcile Every Payment with MT103 Documentation

MT103 is the SWIFT message with routing and charges. Learn how to use it in this MT103 reconciliation guide. Check fields 71A, 71F, 71G, and dispute if OUR was mishandled. More examples in the SWIFT fee breakdown in India.

What to Do When You Receive Less Than Expected

Check Your Remittance Advice and Bank Statement

Review original amount sent, itemized deductions, applied exchange rate, and net INR credited. If charges look off, contact your bank’s remittance desk. Reference: SWIFT fee breakdown in India.

Request the MT103 Document

Ask your client or bank for the MT103. Examine fields 32A, 71A, 71F, 71G. If OUR appears but deductions happened, you have grounds to dispute. Steps outlined in the SWIFT fee breakdown in India.

Contact the Sender’s Bank for OUR Discrepancies

If OUR was sent yet fees were deducted, have the sender dispute with their bank. Some refunds are possible, though correspondent charges are hard to reclaim. See SWIFT correspondent fees for expectations.

Understand FEMA and GST Implications

Your e-FIRA reflects the net proceeds credited. Report the full invoice value for GST exports, but maintain documentation of fees and short credits to explain variances during audits. Guidance here: SWIFT fee breakdown in India.

India-Specific Considerations

RBI and FEMA Compliance

Ensure every inward remittance is recorded with an e-FIRA. Platforms like Karbon Business generate e-FIRA automatically, while traditional banks may require branch requests. See process notes in the SWIFT fee breakdown in India.

Exchange Rate Markups Add to the Problem

Banks often add 1–3% FX markup over mid-market rates, silently reducing your INR proceeds. Platforms using live Xe rates with zero markup can improve outcomes by 2–4%. Read more in the SWIFT fee breakdown in India.

Currency Holding for Forex Risk Management

Some platforms let you hold USD, GBP, or EUR up to 60 days, converting when rates are favorable to offset fees.

Quick Reference Glossary

• Lifting Fee: Final-stage charge by your Indian bank to credit foreign funds.
• Correspondent Charges: Deductions by intermediary banks mid-route.
• Intermediary Bank Charges: Umbrella term for mid-route deductions and sometimes lifting.
• OUR: Sender pays all fees, execution varies.
• SHA: Shared fees, receiver pays intermediaries and receiving bank charges.
• BEN: Beneficiary pays all fees.
• MT103: SWIFT message used to verify routing and charges.
• Nostro Account: Foreign currency account your bank maintains abroad.
• e-FIRA: Electronic advice for inward remittances, needed for compliance.

Sample Invoice Payment Terms

Payment Terms

Amount Due: $2,000.00 USD
Payment Method: International bank transfer only
Charge Code: OUR (sender pays all charges)
Instructions: Sender covers origination charges, intermediary bank charges, correspondent fees, and lifting fees. No deductions permitted from the invoice amount.
Arrival Requirement: Full $2,000.00 must credit the beneficiary account. Any shortfall due to bank charges will be invoiced separately.
Confirmation Required: Provide MT103 SWIFT confirmation or payment receipt within 24 hours of initiating transfer.
Beneficiary Details: Legal name, complete account number, bank name and branch, SWIFT, bank address.
Alternative Payment: To reduce fees and speed up settlement, pay via local rails (ACH, SEPA, FPS) to virtual account details if available.

Platform Recommendations for Indian Freelancers

Evaluate platforms that offer virtual USD, GBP, EUR accounts, SWIFT or ACH receiving, predictable fees, and RBI, FEMA compliant e-FIRA support:

• Karbon Business: local USD, GBP, EUR, CAD details, domestic transfers, flat 1% fee, zero FX markup at live mid-market rates, automatic e-FIRA within 24 hours, currency holding up to 60 days.
• Wise Business: multi-currency accounts, local details in many currencies, transparent fees, mid-market FX.
• Payoneer: virtual receiving accounts, marketplace integrations, widely used among Indian freelancers.
• RazorpayX International: India-focused compliance support and integrations with domestic accounting tools.

Common thread: These solutions bypass traditional SWIFT correspondent chains, saving the 2–5% typically lost to intermediary charges and lifting fees.

FAQ

What is the exact difference between lifting fees and correspondent charges for freelancers in India?

Lifting fees are applied by your Indian receiving bank when crediting foreign funds to your INR account, while correspondent charges are deducted by intermediary banks during SWIFT transit, usually $10 to $30 per hop. Both can hit the same payment. For a background explainer, see what are intermediary banks and how do they work.

Under OUR, SHA, BEN, who pays lifting fees and correspondent charges?

OUR means the sender should pay all fees, though execution varies and intermediaries may still deduct. SHA, the default, makes the sender pay their bank’s fee, while you pay intermediary and receiving bank charges. BEN makes you pay everything, avoid it. See the SWIFT fee breakdown in India for examples.

Client sent money under OUR but my bank still deducted lifting fee, how to handle?

Request the MT103, check field 71A for OUR, and fields 71F and 71G for charges. If OUR is confirmed yet you were charged, open a dispute with your bank using MT103 as proof. The sender’s bank may reimburse. Typical behavior is documented in HSBC remittance fees and charges.

How can I avoid deductions on small invoices like $300 or $500?

Use OUR, bundle small invoices into one larger payment, or bypass SWIFT using local rails via a platform. For instance, Karbon Business lets US clients pay via ACH domestically, eliminating correspondent charges and reducing total fees.

My client’s bank says intermediary charges are unavoidable, what practical workaround is there?

Ask the client to gross up the payment or switch to local rails like ACH, SEPA, FPS via a virtual account. If they must use SWIFT, choose banks with direct corridors to India to reduce hops. If deductions occur, reconcile using MT103 and dispute. Reference: SWIFT correspondent fees.

For GST filings, should I report the full invoice value or the net credited amount?

Report the full export invoice value for GST, but your e-FIRA reflects the net credited amount. Keep documentation of intermediary deductions and bank fees to explain variances during audits. Examples appear in the SWIFT fee breakdown in India.

Can I get refunds if correspondent banks deducted fees even under OUR?

Sometimes, but not always. The sender must dispute with their bank, who may pursue recovery from intermediaries. Results vary, and standard SHA deductions are not refundable. Use MT103 to support your case. See the SWIFT fee breakdown in India for process tips.

Is using a platform like Karbon Business better than direct bank SWIFT for regular freelance payments?

For frequent payments under $10,000, yes. Local rails remove correspondent banks, fees are transparent, FX markup can be zero, and e-FIRA is generated automatically. Karbon Business charges a flat 1% with zero FX markup, typically netting you 2–4% more than traditional SWIFT routes.

What payment instructions should I include in my invoice to protect against short credits?

Specify OUR charge code, state the sender covers all fees including lifting and intermediary charges, forbid deductions from the invoice amount, require MT103 on payment, and include exact beneficiary details. This reduces re-routing and surprise deductions.

Does FX markup at Indian banks matter as much as lifting fees and correspondent charges?

Yes, FX markup of 1–3% can exceed lifting fees on many transfers. Using platforms that convert at live mid-market rates with zero markup, for example Karbon Business, can materially increase your INR proceeds.

How do I use MT103 to reconcile and dispute short payments effectively?

Obtain the MT103, verify the original amount in 32A, the charge code in 71A, sender’s charges in 71F, receiver’s charges in 71G. If OUR was specified but deductions occurred, raise a ticket with your bank and provide the MT103. Learn reconciliation steps in this MT103 reconciliation guide.

Can I hold USD or EUR for a while to get a better INR rate and offset fees?

Yes, some platforms allow currency holding for up to 60 days, so you can convert when rates are favorable. This can offset losses from lifting fees and correspondent charges. Karbon Business includes this feature for freelancers managing forex risk.