Getting Paid by Overseas Clients on a Forfettario: Where the FX Margin Disappears

Your American client says they paid in full, but your Italian bank account shows less than you invoiced. On the regime forfettario, you can’t deduct that missing money, so every euro lost in transit is simply gone. This guide shows where the foreign exchange margin and transfer fees go, works through a real invoice, and explains how to set up overseas payments so more of your fee reaches you.

Why Your Overseas Invoice Never Arrives Whole

When I first started freelancing from Bologna, I invoiced a London agency and a small startup in Austin in the same month. Both paid on time, and both payments arrived short. Neither client had done anything wrong. My bank’s statement showed a single euro figure with no breakdown, and it took me a long time to work out where the rest had gone.

The frustrating part is that nobody ever tells you a fee has been charged. There is no line on your bank statement saying “exchange rate markup.” The money just arrives a bit lighter than you expected. Most freelancers assume a small shortfall is normal and move on, and that assumption costs them a lot over a career.

The Three Places Money Leaks

An international payment can lose value at three separate points before it reaches your Italian account.

The first and largest is the exchange rate margin. When a bank converts dollars or pounds into euros, it rarely uses the mid-market rate, which is the real rate you see on financial news sites. It uses its own rate, set slightly in its favour, and keeps the difference. Because this is built into the rate rather than listed as a fee, it is the hardest leak to spot.

The second is the intermediary bank deduction. A traditional SWIFT transfer often passes through one or more correspondent banks between your client’s bank and yours. Each one can take a cut. Your client can’t see it, and neither can you. You just receive less.

The third is the receiving fee. Many Italian banks charge you for accepting an incoming foreign transfer, especially one from outside the SEPA zone. It shows up as a separate small charge, often on a different line or a different day from the payment itself.

Why the Forfettario Makes Every Leak Hurt More

If you are on the flat-rate regime, these leaks hurt more than they would under ordinary accounting. If you are new to the regime, start with The Regime Forfettario in Italy: Flat-Rate Tax for Freelancers. The short version is that your taxable income is not your revenue minus your actual expenses. It is your revenue multiplied by a fixed profitability coefficient set for your activity type.

So you cannot list bank charges or exchange losses as business costs, the way a freelancer under the ordinary regime might. The coefficient is supposed to cover all your costs in a lump. Whatever your bank takes is not offset anywhere. It comes straight out of your earnings.

Your social security contributions work the same way. They are calculated on that same flat base, so your gestione separata or artisan and trader contributions don’t care how much the currency conversion cost you. For the contribution side, see How to Pay INPS Contributions as a Freelancer in Italy. For the tax rate itself, see How Much Tax Do Freelancers Pay Under the Forfettario?. The practical lesson is that on the forfettario, preventing losses is your only option, because you can’t deduct them afterwards.

A Worked Example: Following One Invoice to Your Italian Account

Abstract warnings are easy to ignore, so here is a real-shaped example. It matches what happened to me and to several freelancers I know in the Bologna coworking scene.

You’re a translator on the forfettario. You invoice a client in the United States for a project worth €2,300 at the mid-market exchange rate on the day they pay. They send the equivalent in dollars by ordinary international wire to your Italian high-street bank.

The Invoice and the Hidden Exchange Rate

Your bank receives dollars and has to turn them into euros. Instead of the mid-market rate, it applies its own rate with a margin built in. After conversion, your €2,300 has become €2,225. Nobody sent you a notice about this. The rate simply looked a little worse than the one you saw online that morning.

This is the leak almost everyone misses, because there is nothing to see. If you don’t check the mid-market rate on the day the money lands and compare it with what you got, you’ll never know it happened. I didn’t check for my first several months of freelancing.

Intermediary Banks and the Receiving Fee

On its way from Texas to Emilia-Romagna, the wire passed through an intermediary bank, which took €20 before the money reached your bank. Then your own bank charged a €15 fee for receiving a foreign transfer.

So the amount that actually arrives is €2,225 minus €20 minus €15, which is €2,190. The total loss compared with the €2,300 the work was worth is €110, about 4.8% of the invoice.

What 4.8% Means Over a Year

Losing about 4.8% on one invoice is annoying. Losing it on every invoice is a real problem. If all your foreign clients pay this way, you are working close to one day in every twenty without being paid for it. Under the forfettario, you also get no deduction for it.

Then there’s the paperwork. Your commercialista will see an invoice for one figure and a payment for another, and will ask you to explain the difference. If you can’t, they’ll spend billable time working it out themselves. One freelance designer I know in Turin had a whole year of mismatches like this. Sorting them out cost her an afternoon of her accountant’s time, plus a lot of stress before the filing deadline.

Comparing the Ways Overseas Clients Can Pay You

Once you know where the money leaks, you can compare the realistic options. In my experience, most forfettario freelancers in Italy end up with some mix of three channels.

Traditional SWIFT Transfer Into an Italian Bank

Most freelancers start here, because it’s what clients offer by default. You give them your IBAN, they send a wire, and the money eventually shows up. It seems simple, but the worked example above shows what it costs.

There are some real advantages. The money goes straight into your Italian account, which is the one your F24 payments and direct debits come out of. Your commercialista is used to seeing these statements. It needs no new accounts and no explaining to clients.

The downsides are the three leaks. You have no control over the conversion rate, you can’t see intermediary deductions, and receiving fees vary from bank to bank. Transfers from outside SEPA can also take several working days, and you can’t easily track where the money is. If you want to stay with your bank, at least read How to Reduce Bank Fees in Italy as a Foreigner so you know what your current account is charging you.

Payment Platforms and Card Processors

Some clients, especially smaller ones, would rather pay through an online payment platform or by card through an invoicing tool. It’s convenient, and clients like being able to click “pay.”

The cost structure is usually less clear than it looks. You often pay a percentage on receipt, and then another exchange margin when you withdraw to your Italian bank in euros. Some platforms convert automatically at their own rate unless you change the setting. Freelancers I talk to usually find these platforms fine for small, occasional payments and painful for regular, larger invoices.

Local Account Details Through Wise

This is the setup I use now, and the one I recommend to most freelancers who ask me over an aperitivo. Wise gives you local account details in several major currencies. Your American client gets American-style details, your British client gets British-style details, and each of them makes what is a domestic payment from their side.

That one change removes most of the leaks. No international wire is involved, so there’s no correspondent bank to take a cut. The money arrives as dollars or pounds in your multi-currency balance. You then decide when to convert it to euros, at the mid-market rate with Wise’s conversion fee shown before you confirm. You see the cost up front, which is the opposite of the bank model where you only find out afterwards. Fees depend on currency and amount, so check Wise’s own pricing page for current figures rather than relying on anyone’s old screenshot.

Setting Up Wise as a Forfettario Freelancer

This is the hands-on part. Setup is straightforward, but a few choices early on will make tax time much easier later.

Personal or Business Account

On the forfettario, you are a sole trader with a partita IVA, not a company. Even so, I strongly suggest keeping business money separate from personal money. Wise offers both personal and business accounts, and the business account is built for invoicing clients and keeping records apart from your groceries and rent.

The reason is practical. Your commercialista needs to see your professional receipts clearly. If client payments are mixed in with refunds from friends, transfers from your parents back home and your Esselunga card spending, every reconciliation becomes a guessing game. A separate account means every incoming payment is either an invoice or something that needs explaining.

Before you open any account, make sure you actually qualify for the regime and plan to stay in it, because the bookkeeping changes if you move to the ordinary regime. If you’re not sure, read Who Qualifies for the Regime Forfettario in Italy? first.

Step-by-Step Setup

Here is the order I suggest, based on getting this wrong myself and then helping several friends get it right.

1. Have your partita IVA documents ready, including your codice fiscale, your VAT number registration and your ATECO activity code. You’ll need to describe your business accurately during verification.
2. Open the account and complete identity verification with your passport or Italian identity card and proof of your Italian address. Use the same address as on your partita IVA registration to avoid mismatches.
3. Enable account details for each currency your clients actually pay in. For most freelancers that means US dollars and British pounds, and sometimes others depending on your client base.
4. Make a short client-facing document listing the correct details for each currency. You’ll send this with every invoice.
5. Add your Italian bank account as a saved recipient, so converted euros can be moved quickly to the account your F24 and direct debits come from.
6. Download a test statement once the first payment has arrived, and send it to your commercialista to confirm the format suits them before you build your whole system around it.
7. Pick a regular day each month to review balances, convert what you need and export statements, so your records never fall more than a month behind.

Telling Clients How to Pay You

Overseas clients often have accounts payable departments that work on autopilot. If your invoice still shows your Italian IBAN in the payment box, they’ll keep sending international wires, and you’ll keep losing money.

Put the local account details for the client’s currency on the invoice itself, clearly labelled. When I switched, I sent each regular client a short, friendly email explaining that I had new local details in their currency and that paying this way was simpler for them. Not one objected. Most were glad, since domestic payments are cheaper and easier for them too.

You should also tell clients not to choose an option that converts to euros on their side before sending. Some business banking portals offer this, and it brings back exactly the margin you’re trying to avoid. You want them to send their own currency, so the conversion happens in your Wise balance on your terms.

Invoices, Bookkeeping, and Tax Housekeeping

Getting paid well matters, but under the forfettario your records also have to hold up when your commercialista prepares your return. A cheaper payment route is no use if your books turn into a mess.

Writing the Foreign-Currency Fattura

Forfettario invoices go through the electronic invoicing system like any other, and they must include the wording that states you’re under the flat-rate regime and not charging IVA. If you’re unsure about format, transmission or the stamp duty on invoices without VAT, read Issuing Electronic Invoices (Fattura Elettronica) as a Freelancer before your next invoice goes out.

Foreign-currency invoices add a step, because the amount in the foreign currency has to be reconciled to a euro value. You need to know which exchange rate applies and keep a record of it. The detailed mechanics are in Foreign-Currency Invoices and Fattura Elettronica: Exchange Rate Record-Keeping. In general, agree the method with your accountant once, then use it the same way on every invoice, and keep evidence of the rate for each payment.

Consistency matters more than people think. A freelancer who uses one method in March and another in September gives their accountant an impossible job. Pick one approach, write it down and stick to it.

Records Your Commercialista Will Want

This is where Wise’s itemised statements help most. Each incoming payment shows the payer, the amount in the original currency and the date. Each conversion shows the amount, the rate and the fee as separate lines. That’s what your commercialista needs to match a received payment to an issued fattura without guessing.

My routine is simple. Each month I export the statement for each currency balance as a PDF and a spreadsheet, rename the files with the month and currency, and put them in a shared folder with my accountant next to the matching invoices. When filing season comes, the reconciliation is already done.

If your current accountant isn’t comfortable with multi-currency statements, it may be time to find one who is. Many expats prefer someone who can talk them through these things in English. How to Find an English-Speaking Commercialista in Italy covers where to look and what to ask.

Foreign Account Reporting

Freelancers often forget this one. A Wise account is not an Italian bank account. Italian tax residents who hold accounts or assets abroad generally have monitoring obligations on their tax return, through what’s commonly called the quadro RW, and there may be a wealth tax on certain foreign holdings.

Using an overseas account isn’t a problem in itself. You just need to declare it, and your commercialista needs to know it exists. Make sure they know about every account you hold, including balances in currencies you rarely use. The background is in Declaring Overseas Assets (IVIE/IVAFE) in Italy. Bring it up at your first meeting of the year so it doesn’t become a rush in the final week before the deadline.

Habits That Keep the Margin in Your Pocket

Setting up the right account fixes most of the problem. The rest comes from habits. Here is what I’ve learned from my own mistakes and from listening to other freelancers.

When to Convert and When to Hold

Being able to hold dollars or pounds instead of converting straight away is useful, but it needs some discipline. If you have regular costs in the same currency, such as software subscriptions billed in dollars, holding some dollars lets you pay them without converting twice. Converting euros to dollars and back is the kind of round trip that adds up quietly. Holding Euros, Pounds, and Dollars in One Account: What Converting Costs goes into detail on this.

On the other hand, your Italian obligations are all in euros: rent, utilities, F24 payments, INPS contributions. Holding foreign currency in the hope the rate improves is speculation, and most freelancers shouldn’t be speculating with the money they need for tax. My own rule is to convert enough each month to cover euro commitments with a buffer, and to keep foreign balances only for real foreign-currency costs.

Pay particular attention to tax deadlines. Under the forfettario, the main payment dates bring large euro bills all at once. Convert in good time before them, not in a panic the day before, when you’re more likely to make mistakes.

Mistakes I See Freelancers Make Again and Again

The most common mistake is keeping your Italian IBAN on the invoice after opening a Wise account. The new account does nothing if clients don’t know about it. Update your invoice template the same day you open the account.

The second is letting clients or platforms convert to euros before the money reaches you. Every automatic conversion you didn’t choose is probably a margin you didn’t need to pay. Check the settings on every tool you use to receive money.

The third is mixing personal and business transactions. Under the forfettario it feels harmless, since you aren’t deducting expenses anyway. But your accountant still has to identify which receipts are professional income, and a mixed account makes that slower and more expensive.

The fourth is not telling your commercialista about a foreign account. Months later this turns into an awkward conversation and a late correction to your return. Mention it as soon as you open the account.

The fifth is never checking the real numbers. Once a quarter, take one recent payment and compare what arrived with the mid-market value on that day. If you’re still on a bank wire and see a gap like the €110 in the worked example above, that’s the sign to switch. If you’ve moved to Wise and the numbers match the fee you saw before converting, your setup is working.

Freelancing from Italy on the forfettario can be a very good arrangement: simple taxes, clear rules, and clients anywhere in the world. You’ve already done the work by the time the invoice goes out, so there’s no reason to keep giving away part of your fee in transfer costs. Open a Wise account, send your clients local details, keep tidy statements for your commercialista, and keep the full value of what you earn.

Disclaimer

This article is for general informational purposes only and does not constitute professional advice. Laws, prices and regulations vary by location and change over time. Consult a qualified professional for guidance on your specific situation.

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