2026-02-21

How to Track Freelance Income Across Multiple Currencies

If you freelance internationally, you already know the problem. You invoice one client in USD, another in EUR, a third in GBP. You receive payments into accounts denominated in different currencies, at exchange rates that shift between the date you invoice and the date you get paid. Your actual income in the currency you spend is a moving target. This guide covers how to track it properly, from choosing an accounting currency to handling FX differences on delayed payments.

Why Multi-Currency Income Tracking Is Harder Than It Looks

When you earn in a single currency, tracking income is simple: add up what you received. When you earn in multiple currencies, you face three complications that most accounting tools were not built to handle.

1. Invoice Currency vs. Receipt Currency vs. Spending Currency

You may invoice a US client in USD, receive the payment into your Wise USD balance, convert part of it to THB to pay rent in Bangkok, and leave the rest in USD. Your income was USD, your receipt was USD, but your spending was THB. Which exchange rate do you use to track the “real” value of that income?

2. Exchange Rate Timing

Currencies move. If you invoice 5,000 USD on January 1 and get paid on February 15, the value of that 5,000 USD in your home currency has changed. If your home currency is GBP and GBP/USD moved from 1.27 to 1.24 during that period, your 5,000 USD is worth more in GBP when you receive it than when you invoiced it. Is that an FX gain, or is it just your income?

Tax authorities have clear rules about this (more on that below), but for personal tracking purposes, you need to decide which rate you use.

3. Unrealized FX Exposure

If you keep earned income in a foreign currency balance — for example, leaving USD in your Wise account for months — you are exposed to FX risk on that balance. A 5% move in the exchange rate changes the value of your savings in home currency terms by 5%. This is not theoretical. Nomads who held large GBP balances in June 2016 (Brexit referendum) saw their home currency value drop 10% overnight.

Step 1: Choose an Accounting Currency

You need a single currency in which you measure all income, expenses, and net worth. This is your “functional currency” or “accounting currency.” Everything gets converted to this.

How to choose:

For most freelance nomads, the best choice is the currency of your tax residency, because that is the currency in which your tax liability is calculated. If you do not have a clear tax residency (a situation you should resolve, as most countries consider you a tax resident after 183 days), use the currency you earn the most in.

FlashFi lets you set a home currency and automatically converts all holdings, accounts, and values to it. You can change it at any time if your situation changes.

Step 2: Decide Between Invoice Rate and Receipt Rate

When you earn 5,000 EUR for a project, you need to decide which exchange rate to use to record that income in your accounting currency. There are two approaches.

Invoice Date Rate (Accrual Basis)

Record the income at the exchange rate on the date you invoice (or the date you earn it, if different). This is the approach used by most tax authorities for accrual-basis accounting.

Example: You invoice 5,000 EUR on March 1. EUR/USD on March 1 is 1.085. You record $5,425 of income.

When you receive payment on March 20 and EUR/USD is 1.092, the 5,000 EUR is actually worth $5,460. The $35 difference is an FX gain.

Pros: Matches revenue to the period in which it was earned. Required for accrual-basis taxpayers.

Cons: Creates FX gains and losses that you need to track separately.

Receipt Date Rate (Cash Basis)

Record the income at the exchange rate on the date you actually receive the payment. This is simpler and is the approach used by most individuals who file on a cash basis.

Example: You invoice 5,000 EUR on March 1, receive payment on March 20 when EUR/USD is 1.092. You record $5,460 of income. No separate FX gain or loss.

Pros: Simpler. One rate per transaction. No FX gain/loss accounting.

Cons: If there is a long delay between invoicing and payment, your income for a given month may not reflect the work you actually did that month.

Which Should You Use?

If you are a cash-basis taxpayer (most individual freelancers are), use the receipt date rate. It is simpler and consistent with how you report income on your tax return.

If you are a US citizen abroad, the IRS requires you to use the exchange rate on the date the income was “received or accrued,” depending on your accounting method. For cash-basis taxpayers, that is the date you receive the payment. Per IRS guidance on foreign currency transactions, you should use a “consistently applied” exchange rate. The IRS accepts the rates published by the Treasury Financial Management Service.

If you are a UK tax resident, HMRC requires you to convert foreign income to GBP using the exchange rate at the date of receipt for cash-basis traders, or the date of the transaction for accrual-basis traders. HMRC publishes monthly exchange rates that are acceptable for tax purposes.

Step 3: Handle Delayed Payments and FX Differences

Freelance payments are notoriously delayed. Net-30 terms mean your invoice sits for a month (or longer) before you see the money. During that time, exchange rates move.

Tracking the Gap

If you are using invoice-date rates, you need to track the FX difference when payment arrives:

Invoice Date Payment Date FX Difference
Invoice amount 5,000 EUR 5,000 EUR —
Exchange rate (to USD) 1.085 1.092 +0.007
USD value $5,425 $5,460 +$35 (FX gain)

If the rate had moved the other way (EUR weakened), you would have an FX loss. In most tax jurisdictions, these FX gains and losses are either included in your ordinary income or reported separately. The IRS treats them as ordinary income or loss under Section 988 of the Internal Revenue Code.

Practical Strategies

Convert immediately. The simplest way to avoid FX differences is to convert received payments to your accounting currency as soon as they arrive. If you use Wise or Payoneer, this takes seconds. The FX exposure exists only for the delay between invoicing and receipt.

Batch conversions. If converting every payment individually is impractical, convert weekly or monthly. This creates small FX differences, but they are manageable. Keep a log of the rate you used for each batch.

Keep a running FX log. For each foreign currency payment received, note: - Invoice date and amount in foreign currency - Receipt date and amount in foreign currency - Exchange rate at receipt - Value in accounting currency - FX gain/loss (if using invoice-date rates)

This log is invaluable at tax time, especially if you are subject to FBAR filing requirements (US citizens with foreign accounts exceeding $10,000 in aggregate).

Step 4: Choose the Right Tools

Payment Platforms

Wise (formerly TransferWise): Multi-currency account with balances in 40+ currencies. Competitive FX rates (typically 0.3% to 0.6% over the mid-market rate). You can receive payments in USD, EUR, GBP, AUD, and others with local bank details, meaning clients pay as if they are sending a domestic transfer. Wise also provides monthly statements that show each transaction and the exchange rate used.

Payoneer: Similar multi-currency functionality. Stronger in markets where Wise has less coverage (e.g., some Asian and Latin American countries). Payoneer’s FX rates are generally less competitive than Wise’s (often 1% to 2% over mid-market), but the platform is widely accepted by international clients and marketplaces. Useful for freelancers based in Colombia, Indonesia, or other countries where local bank integration is important.

Mercury / Relay / traditional banks: If you have a US LLC or entity, Mercury and Relay offer US business bank accounts that can receive international wires. FX conversion happens at the correspondent bank’s rate, which is typically worse than Wise or Payoneer. This approach makes sense if your clients strongly prefer paying via wire transfer.

Accounting and Invoicing

Xero: Supports multi-currency invoicing and automatically tracks FX gains and losses. If you are doing proper double-entry bookkeeping, Xero is the most international-friendly option. It handles invoice-date vs. receipt-date FX differences natively.

Wave: Free invoicing with multi-currency support. Less sophisticated FX tracking than Xero, but works well for simple freelance businesses. Does not automatically calculate FX gains/losses.

Invoicing only (Stripe Invoicing, PayPal Invoicing): These platforms let you invoice in different currencies and handle FX conversion, but they are not accounting tools. You still need something to track your actual income and FX exposure.

Portfolio and Net Worth Tracking

Your freelance income ends up somewhere — bank accounts, brokerage accounts, savings, crypto. If those are spread across multiple currencies and countries, you need a way to see the full picture.

FlashFi tracks your total financial position: investments, cash accounts, savings, and debt, all converted to your home currency. For freelancers who are also investors, this means you can see how your earned income (sitting in Wise balances) plus your invested capital (in brokerage accounts) plus your crypto holdings all add up to your actual net worth. Our guide on how to calculate net worth across countries covers this in detail.

Step 5: Plan for Tax Reporting

Multi-currency income creates extra work at tax time. Here is what to prepare for, depending on where you file.

United States (US citizens and residents)

United Kingdom

Countries Without Income Tax

If you are based in the UAE or another zero-income-tax jurisdiction, multi-currency income tracking is less about tax compliance and more about understanding your actual financial position. You still need to track income for budgeting, net worth calculation, and investment planning.

Nomad Hubs with Territorial Taxation

Several popular nomad destinations use territorial taxation, meaning they only tax income earned within their borders. If you are based in Georgia, Costa Rica, or Thailand (under certain visa types), your foreign-source freelance income may not be taxable locally. However, you still need records to prove the income was foreign-sourced, and you may still have tax obligations in your country of citizenship (especially if you are American).

Common Mistakes to Avoid

Not tracking FX at all. Some freelancers simply look at the amount that arrived in their bank account and call it income. This works until your tax authority asks you to prove your income matches what was reported, or until you realize your “income” fluctuated 10% from month to month due to currency swings rather than actual changes in work volume.

Mixing personal and business currencies. If you receive USD for work and spend it on personal expenses, the FX gain or loss between receipt and spending is technically taxable in some jurisdictions (though the US Section 988 de minimis rule excludes gains under $200 per transaction). Keep business and personal currency conversions separate.

Ignoring unrealized FX exposure. If you are sitting on 20,000 EUR in a Wise balance and your home currency is USD, you are effectively long EUR. If EUR drops 5%, you just lost $1,000 of purchasing power. This is not a tax event (unrealized), but it is real. Track it.

Using the wrong exchange rate source. For tax purposes, use the rate accepted by your tax authority. For the IRS, that is the Treasury FMS rates or a consistently applied commercial rate. For HMRC, it is their published monthly rates or the actual rate at the date of the transaction. Do not use Google’s exchange rate widget — it is not an authoritative source.

Putting It All Together

Here is a practical workflow for a freelancer earning in multiple currencies:

  1. Set your accounting currency (typically your tax residency currency).
  2. Invoice clients in their preferred currency.
  3. Record each payment received with the receipt date, amount in foreign currency, exchange rate, and value in accounting currency.
  4. Convert to your accounting currency promptly (within a day or a week) to minimize FX exposure.
  5. Track FX gains/losses if you use invoice-date rates, or skip this if you are a cash-basis taxpayer using receipt-date rates.
  6. Move excess funds to investments — and track those in your portfolio alongside your cash balances.
  7. At tax time, use your FX log and accounting records to report income in the correct currency with the correct exchange rates.

The goal is to always know, in your home currency, exactly how much you earned, how much you have, and where it is. If your income is in three currencies and your investments are in four more, that picture only comes together with deliberate tracking.

For more on managing a multi-currency financial life, see our guides on building a multi-currency portfolio and how to track investments across multiple currencies.

Track your income, investments, and net worth in one place with FlashFi — built for freelancers who earn across borders.

By David Brougham