RaiD, I think they pay his expenses, not purchase him. But...the object of "para" is another subject?
Since I'm no expert in english, I wonder if the sentence in english is not wrong? I always confuse the uses of "for" and "to", so... Nós pagamos para ele or Nós pagamos ele means We pay him or We pay to him (the employee's salary, for example). And that could be why RaiD misunderstood the meaning of the sentence? If the "for" in the sentence sounds more like you are purchasing a person (to avoid slavery talk, let's think in a soccer/football player being sold to another team), then the translation would be really wrong, because that would be "Nós pagamos por ele".
It can also be used like this
He doesn't have enough money to purchase his food, so we pay for him. meaning ( we purchase his meal for him)
I hope this helps! Native English speaker :-)
Oh yeah, that's right. So the translation is ok. We can use both "por" and "para" to mean "We pay in his place" (and we also use "para" meaning "We pay him"). Which can be confusing, just context will show what they actually mean with it.
How can I identify the role of "para"? In some sentences, for example "Eu falo para ele" I am saying "I talk TO him", but in this case "Nós pagamos para ele" I am not saying "We pay TO him" but "We pay FOR him".
Prepositions are tricky, there's no rule for you to know for sure how you can use them unless actually using it; "I talk to him" is better translated as "Eu falo com ele", with "Eu falo para ele" better translating "I tell him". About the use of prepositions after the verb to pay, I recommend you to see my response to melesana, and add to the conversation if you can.