Note: This invoicing process applies to all customers who sign up with Oyster from Jan 2023 onwards. If you are an existing customer who signed up before 2023, this invoicing process will apply to you from the February 2023 invoice cycle onwards.
1. Where can I see an overview of the invoicing process?
You will be able to download the invoicing process from the invoice tab.
2. Does this invoicing process apply to contractor invoices?
No, this new process only applies to your full-time or permanent team members.
3. What is a pre-funding invoice, and what are the usual costs included?
Our pre-funding invoice is a statistical estimation of payroll costs, and it is not meant to have the precision of a payroll engine. This statistical estimation will help us collect a reasonable amount of funds ahead of the Team Member's payroll. This invoice cannot be disputed.
The pre-funding invoice includes the following costs:
- Monthly Rate: Annual salary / 12 months, with generic pro-rata in case of hire or termination
- Bonuses
- Commissions
- Allowances
- Benefits
- Approved expenses
- Taxes & Contributions: Estimated statutory employment taxes and social security payments/contributions applicable in a Team Member's service region.
- Service taxes: Represents local sales tax costs arising from the provision of Team Member Services in certain regions, such as VAT or Brazil ISS. It is calculated as a percentage (more information on Value-added Tax (VAT) and how it works) applied to the Total Service Cost except Expenses and Benefits.
Remember that the Oyster fee will be reflected only in the settlement invoice.
4. What is the settlement invoice, and what are the usual costs included?
Our settlement invoice reflects the final payroll costs. Any differences or errors will be made whole (as an extra amount owing or a refund). This invoice can be disputed.
The settlement invoice will include the following:
The same columns as in prefunding, but with the actual monthly costs prepared according to payroll calculations:
- Monthly Rate: with country-specific pro-rata in case of hire or termination
- Bonuses
- Commissions
- Allowances
- Benefits
- Approved expenses
- Taxes & Contributions: Actual employment taxes and social security contributions
- Service taxes: Updated accordingly to the updated Total Service Cost.
Additional columns:
- 13th/14th Month rate: prorated based on Engagement Start / End Date
-
Other Local Accruals: Typically includes (but is not limited to) accruals for:
- Severance
- Time off
- Profit Share - Termination Costs: Represents final payments made to Team Members upon termination of service (e.g. payment of notice period, redundancy pay, negotiated severance and other payments required by law upon termination of service).
- Unused Vacation Payment: If a Team Member has an unused vacation balance, this will typically be paid out in their payslip upon termination, or in some cases, at the end of the year.
-
Other Employer Costs: Typically includes (but is not limited to) one-time costs relating to:
- Onboarding (e.g. statutory medical checks)
- Immigration / right to work - Oysters fees: such as Oyster subscription fee and Oyster benefit fee
5. What happens if the pre-funding invoice exceeds the actual payroll?
The pre-funding invoice is unlikely to be higher than the actual payroll because it does not include every payroll item; for example, local severance accruals or pension contributions are not captured in the pre-funding invoice. Your monthly Oyster fee is also not included in the pre-funding invoice - it is only charged in the settlement invoice.
This means we err on the side of underestimating the pre-funding invoice so that you don’t pay more than the actual amount. In the unlikely case that we overcharge you at pre-funding, you can rest assured that a refund will be initiated immediately through the settlement invoice.
6. Why can’t I dispute my pre-funding invoice?
The Pre-funding invoice is non-disputable to ensure we have the funds to pay your team members on time. The Pre-funding invoice is only an estimate of payroll for the month, where we aim to undercharge rather than overcharge our customers. We will correct any deviations from the payroll amount through the second invoice - the Settlement invoice. You can dispute a Settlement invoice.
7. What FX rates are applied on the Pre-funding and Settlement invoice?
We apply the FX rate on the last working day of the previous month. For example, the Pre-funding invoice issued on the 11th of June will use the FX rate as of 31 May. This same FX rate is applied to the Settlement invoice for consistency.
8. We have a Direct Debit setup. Does this mean we will pay for both invoices through Direct Debit?
Yes. Direct Debit will be your default payment method for both invoices.
Also, See: What are credit notes, and what happens after I receive one?
