South African Farm Workers’ Guide to Sending Money Home: 2024 Update

Last updated on March 28th, 2024 at 09:38 pm

Why do American farmers like South African farm workers? It’s simple: they’re hardworking and don’t shy away from tough jobs. With COVID-19 travel bans lifting, there’s a big wave of South Africans heading to U.S. farms. If you’re working in the U.S. agricultural sector this year, here’s everything you need to know about earning, saving, and sending money home.

South African Farm Labor: A Quick History

In recent years, U.S. farmers have been struggling with a severe shortage of domestic labor, which has resulted in crops left to rot and farms not running at full capacity. To address this issue, U.S. farmers have turned to international recruitment via H2-A visa holders, including workers from South Africa.

Farmers like Montana’s Travis Choat and South Dakota’s Mike Brosnan exemplify the U.S. agricultural sector’s shift toward hiring South African workers. Despite offering competitive wages and benefits, local labor shortages have pushed them to look internationally for reliable farmhands, specifically those with dedication to the plaaslewe.

According to Food For Mzansi, South Africans are back in demand on American farms. “We are willing to do the tough jobs and the hard jobs on the farm and we do it without asking any questions,” says Christo Gaybba, a South African farm worker in the U.S., embodying the spirit of uithouvermoë.

Making the Most of Your Pay

1. Hourly Wage: You get paid for each hour you work. The law says you must get at least the minimum wage. This amount is different in each state.
2. Overtime? No extra money for working more hours, unfortunately. You’re paid by the hour, so that’s what you get, no matter how long you work.
3. Taxes: Yes, they’re a part of life here. You’ll pay federal income tax, and maybe state tax too. Need help? Websites like USA Farm Labor and the IRS Guide for Foreign Agricultural Workers are good places to start.

Money Transfer Tips for South African Farm Workers

Sending money home should be easy and cheap. Here’s how:

• Look for the Best Exchange Rates: Your U.S. dollars should turn into as many ZAR as possible.
• Low Fees Are Key: Some services charge you less to send your money. More money for you and your family.
• Choose Trusted Services: Get recommendations, check TrustPilot, check App Store reviews. Here are a few reasons to consider Remitly.
• Ease of Use Matters: Especially in rural areas, you need a service that’s straightforward. Sending from your phone makes life easy.
• Direct Transfer: You can send your earnings directly from your U.S. bank to your South African account.

Geldoordragwenke vir Suid-Afrikaanse Plaaswerkers

Om geld huis toe te stuur behoort maklik en goedkoop te wees. Hier is hoe:

• Soek die Beste Wisselkoerse: Jou VSA dollars moet in soveel moontlik ZAR omskep word.
• Lae Fooie is Sleutel: Sommige dienste vra jou minder om jou geld te stuur. Meer geld vir jou en jou familie.
• Kies Betroubare Dienste: Kry aanbevelings, kyk na TrustPilot, kyk na App Store resensies. Hier is ‘n paar redes om Remitly te oorweeg.
• Gemak van Gebruik Maak Saak: Veral in landelike gebiede, benodig jy ‘n diens wat eenvoudig is. Om vanaf jou foon te stuur maak die lewe maklik.
• Regstreekse Oordrag: Jy kan jou inkomste direk vanaf jou VSA bankrekening na jou Suid-Afrikaanse rekening stuur.

How to Send Money to South Africa with Remitly: Costs Included

Sending money to your loved ones back home in South Africa is straightforward with Remitly, and knowing the costs upfront makes planning your finances easier. Here’s how you can do it, with all the fees and rates clearly explained.

Step 1: Download and Start with a Bonus

• Get the App: First, download the Remitly app. When you join, you’ll get a special deal: a promotional exchange rate on your first transfer, up to $1000.00. This rate is better than the usual exchange rate, meaning you can send more money home. You can see the most current rate in the Remitly app.

Step 2: Enter Your Transfer Amount

• Low Cost Transfers: When you set up your transfer, Remitly shows you the current exchange rate. After your first transfer, you’ll always know the exchange rate before you send, ensuring there are no surprises. No matter how much you send, you get a low fee of $1.99 per transfer.

Step 3: Delivery Options Without the Hidden Costs

• Choose How to Send: Whether it’s a bank deposit or cash pickup, the process is transparent. You decide what’s best for you.

Step 4: Provide Recipient Information Clearly

• Detail for Security: Accuracy here ensures the money goes straight to your family without any hitches. You can send to family or to yourself.

Sending to Major Banks

• You can send money directly to major South African banks like Standard Bank, Capitec Bank, Nedbank Group, Absa Bank, FNB, and others, as well as for pickup at Mukuru.

A Tip for Non-Bank Transfers

Not all families have easy access to a bank. Remitly understands this and offers solutions. You can send money for cash pickup at Mukuru and still track your transfer every step of the way.

You can also edit your transfer details right from the app, if you need to change the pickup location, or your recipient’s name spelling, for example.

Stuur Geld Huis toe met Remitly:

• Laai af: Kry die Remitly app en begin met ‘n bonus.
• Voer in: Jou oordragbedrag en ken die tariewe.
• Kies: Bankdeposito of kontant afhaal.
• Verskaf: Duidelike ontvanger inligting.
• Verstaan: Kostes is laag, geen versteekte fooie.

Navigating USD to ZAR Transfers

Transferring your earnings from the US (USD) back home to South Africa (ZAR) comes with its own set of complexities. While you’re aiming to maximize the Rand received on the other end, several factors come into play that can affect the final amount. Let’s cut through the financial jargon and focus on what truly matters to you.

The Truth About Exchange Rates

The mid-market rate, often cited in financial news as the “real” rate, is more a benchmark than a rate you can access. It’s the halfway point between what banks buy and sell currencies for.

Here’s the kicker: it’s pretty much out of reach for personal money transfers. Services that claim to offer this rate may actually be compensating by sliding in fees elsewhere. Essentially, every service makes a profit; it’s just a matter of where they’re adding their margin.

What This Means for Your Transfers

• Comparison is Key: Always compare the total cost of your transfer, not just the advertised rate. Look at the overall amount of ZAR that will reach your intended recipient.
• Transparency Matters: Opt for services that are upfront about their fees. It’s easier to make a decision when you know exactly what you’re paying for.
• Flexibility Can Save Money: Sometimes, being flexible with your transfer timing allows you to take advantage of better rates or lower fees.
• Read Reviews: Others’ experiences can be incredibly insightful. A service might advertise low fees, but reviews could reveal hidden charges or delays.

You May Also Like: Working on a Cruise Ship and Sending Money Home

Tax Guide for H-2A Visa Holders

As a South African farm worker in the U.S. on a H-2A visa, navigating the U.S. tax system is an important aspect of your employment. H-2A Visa taxation may also apply to cruise ship workers, who hail from South Africa and many other nations.

Here’s what you need to know:

Social Security Number (SSN) and Taxation

• Waiting for Your SSN: It’s common for new workers to wait for their Social Security Number. You’ll need this number for tax purposes, among other things. Once you receive your SSN, you can proceed with the necessary tax filings.

Tax Liability: Monthly vs. Annually

• Tax Payments: In the U.S., income tax is generally paid both annually and through withholdings from your paycheck. As a seasonal worker on a H-2A visa, your employer may not withhold federal income tax from your wages unless you specifically agree to withhold.
• Annual Tax Return: Regardless of withholding, you’re likely required to file an annual tax return with the Internal Revenue Service (IRS) by April 15 of the following year, reporting your earnings from the previous year. This is when you’ll settle your tax bill, paying any owed taxes or requesting a refund if you’ve overpaid.

Social Security and Medicare Taxes

• Exemption: You are exempt from paying U.S. Social Security and Medicare taxes on wages earned while working under the H-2A visa.

Reporting Income

• Form W-2: Your employer will report your compensation of $600 or more on Form W-2, not on Form 1099-MISC. No Social Security or Medicare wages should be reported for H-2A workers on this form.

Tax Return Filing

• Filing Requirements: You may need to file a U.S. federal individual income tax return (Form 1040-NR for nonresident aliens or Form 1040 for resident aliens) to report your income and determine your tax liability.
• Estimated Tax Payments: If you anticipate owing U.S. federal income tax and do not opt for voluntary withholding, you might need to make estimated tax payments using Form 1040-ES (NR) for nonresident aliens.

Backup Withholding

• SSN or ITIN Required: You should provide your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) to your employer. If you don’t, and you earn $600 or more, your employer must start backup withholding at a rate of 24% until you provide your SSN or ITIN.

State and Local Taxes

• Check Locally: In addition to federal taxes, you might be subject to state and local income taxes. Check with state and local tax authorities for any obligations.

Here’s a list of such states, along with information on whether they have state income taxes:

States Hosting South African Farm Workers

1. Montana
   • State Income Tax: Yes
   • Note: Known for wheat, barley, and pulse crops like peas and lentils.
2. South Dakota
   • State Income Tax: No
   • Note: Major producer of corn, soybeans, and sunflowers.
3. North Dakota
   • State Income Tax: Yes
   • Note: Leading in the production of wheat, soybeans, and canola.
4. Arkansas
   • State Income Tax: Yes
   • Note: Notable for rice, soybeans, and poultry.
5. California
   • State Income Tax: Yes
   • Note: California is a major agricultural state with diverse crop needs, including fruits, nuts, dairy, and vegetables.
6. Florida
   • State Income Tax: No
   • Note: Known for its citrus, strawberries, tomatoes, and sugarcane.
7. Texas
   • State Income Tax: No
   • Note: Large agricultural sector with a variety of crops and livestock, including cotton, cattle, and hay.
8. Washington
   • State Income Tax: No (However, there is a capital gains tax)
   • Note: Leading producer of apples, cherries, and hops.
9. Oregon
   • State Income Tax: Yes
   • Note: Significant production of fruits, nuts, and vegetables, including berries, pears, and hazelnuts.
10. Georgia
    • State Income Tax: Yes
    • Note: Major producer of peaches, peanuts, and other crops, including cotton and poultry.
11. Mississippi
    • State Income Tax: Yes
    • Note: Known for its cotton, soybeans, and poultry production.

Even in states without an income tax, H-2A visa holders must still comply with federal tax regulations.

Resources for Tax Assistance

• IRS Publications: Refer to IRS Publication 519 (U.S. Tax Guide for Aliens) and IRS Publication 901 (Tax Treaties) for detailed guidance.
• Tax Professionals: Consider consulting with a tax advisor familiar with non-resident tax issues to ensure compliance and optimize your tax situation.
• Online Resources: Explore the IRS website for forms, publications, and further information on your tax obligations as an H-2A worker.

Resources for Potential South African Farm Workers

For South Africans interested in agricultural work in the U.S., numerous resources can help navigate the complex process:

• Facebook Groups: Platforms like “South Africans in the USA” provide community support, advice, and sharing of personal experiences.
• Recruitment Agents: Companies such as USA Farm Labor Inc. specialize in connecting South African workers with U.S. farms, assisting with the bureaucratic process.
• Online Forums: Websites dedicated to expatriates and seasonal workers offer valuable insights into the application process, visa requirements, and life in the U.S.

Looking Ahead

Your work in the U.S. is a big deal. It’s not just about the money you earn, but also about how you manage and send it home. Congratulations on taking this step.