This article explains the upfront (prepaid) billing procedure on Deel (sometimes called the Advance Fee payment) and how clients can use billing credits to pay eligible Deel fees on the platform.

Note

Some clients are still on the legacy prepaid billing experience (V1). In that version, credits are manually applied during the payment flow, and fee invoices may sit in a pending state. The new experience (V2), described below, automates the credit application process and supports credit allocation by product and entity. We are gradually migrating all clients to V2.

In This Article

• Upfront (Prepaid) Billing and Prepaid Billing Credits (PBC)
• How Upfront (Prepaid) Billing Works
• Product Fees Covered by Prepaid Billing Credits
• Product Fees Not Covered by Prepaid Billing Credits
• Frequently Asked Questions (FAQs)

Upfront (Prepaid) Billing and Prepaid Billing Credits (PBC)

Upfront (prepaid) billing refers to a client agreeing to pay Deel for all applicable fees at the beginning of a contract, committing to a specified number of products or contracts over a predetermined duration. Invoices are generated once the client signs the order form.

After committing to the order form, Deel will issue at least one upfront billing invoice. Once the client pays this invoice and the funds are received, Prepaid Billing Credits (PBC) are added to the organization’s account. These credits are allocated per product and entity at the time the Order Form is signed, then used to automatically cover eligible fees, reducing the client’s future payment obligations.

Only org admins will be able to see an organization's billing credits balance on the app.

How Upfront (Prepaid) Billing Works

The functionality of the prepaid billing will depend on which version the client is using:

For clients on the V1 version

1. The client agrees to the Order Form.
2. A Prepaid billing funding statement is generated.
3. Client pays the funding statement.
4. Credits are allocated to the client’s Prepaid billing balance.
5. Fee invoices are generated at the end of the month and sit in pending status.
6. The client goes through the payment flow to pay for the fee invoice.
7. During the payment flow, clients choose if/how they want to make use of the Prepaid billing credits.

For clients on the V2 version

1. The client agrees to the Order Form.
2. A Prepaid billing funding invoice is generated.
3. Client pays the funding invoice.
4. Credits are allocated to the client’s Prepaid billing balance.
5. Fee invoices are generated at the end of the month.
6. Pre-paid billing Credits are automatically deducted from the fee invoice (Fee invoice never sits in pending, unless the credit amount cannot cover for the full amount of the invoice).

Distributing the Credits

If your organization has been migrated to Deel’s Prepaid Billing V2 flow, you can redistribute Prepaid Billing Credits (PBCs) directly between your committed products and/or entities within the platform. For more details on how to do so, please see the About Prepaid Billing Credits Redistribution article.

What Products Are Currently Covered by Prepaid Billing Credits (PBC)?

Clients on V1 can apply Prepaid Billing Credits (PBC) to any fee invoice during the payment flow.

Clients on V2 can use PBC to cover the following products and services:

Contractors

• Fixed SaaS fees (e.g., $49/month per contractor)
• Percentage-based SaaS fees
• Deel Premium

Deel COR (percentage or flat-rate management fees)

Employer of Record (EOR) fees (must be issued on a stand-alone invoice)

Shield

Global Payroll (GP) fees

Deel HR (HRIS)

Stand-alone service fees, including:

• Custom subdomain setup
• Equipment fees
• Hofy equipment fees
• Background check services
• Engage service fees
• Benefits contract fees
• Mobility fees (must be on a stand-alone invoice, not embedded within an EOR invoice)
• Legal consulting services
• Legal equity services

U.S. payroll service fees

Professional Employer Organization (PEO) fees

Entity creation and maintenance fees

What Products Are Not Covered by PBC on V2?

The following are not eligible for payment using Prepaid Billing Credits on V2:

EOR fees that are included in the worker’s invoice, such as:

• Benefits
• Mobility
• Equipment

Payment processing fees

Off-platform invoices

Late Payment Fees

Net Payment Service Fee

Overdue invoices

Frequently Asked Questions (FAQs)

[ACCORDION] When are invoices paid, and when are they issued?

The number of invoices clients receive and when will depend on the length of the contract and the payment term agreed to. They can be paid in installments of annual, semi-annual, quarterly, and monthly.

Example: 1-year agreement, $12,000 Annual Cost

• Annual: One invoice of $12,000
• Semi-Annual: Two invoices of $6,000 each
• Quarterly: Four invoices of $3,000 each
• Monthly: Twelve invoices of $1,000 each

The logic outlined in example one applies to recurring fees. One-time implementation and upfront costs will always be included in the first invoice of a specific year.

Invoice Cadence

For contracts created after June 17, 2024:

• The initial invoice is issued immediately after the Order Form contract is signed and is due according to the net terms specified.
• Subsequent invoices will be issued consistently on the 23rd of the prior month.
  • For example: If the period starts on April 1, then its invoice will be issued on March 23.

For contracts created before June 17, 2024:

• The first invoice is issued as soon as the contract is created.
• Subsequent invoices are issued 10 days before the next contract cycle start date.

[ACCORDION] When do billing credits become available on the client's account?

Prepaid billing credits become available in the account as soon as the first upfront billing statement is paid and the funds are received by Deel.

This means that billing credits can only be applied after the payment for the first upfront statement has been received and processed.

[ACCORDION] Is an order form legally binding?

Yes, an order form is a legally binding agreement between the customer and Deel.

It outlines commercial terms and the fees the customer is expected to incur, including any discounted pricing, and specifies the amount Deel will bill the customer ("Order Cost") for each year of the order term.

[ACCORDION] Why do clients still receive invoices if they prepay?

Even though Prepaid Billing Credits (PBC) cover eligible fees, invoices are still issued for accurate revenue recognition and client budgeting purposes. These invoices reflect the services used and the application of available billing

[ACCORDION] How can I sync prepaid billing credits (PBC) to my ERP or accounting software?

You can map prepaid billing credits in your accounting settings on Deel. These credits should be mapped to an Asset account. When you purchase credits, the asset account balance increases, and when credits are applied, the balance decreases. Once mapped, prepaid billing credits will automatically sync into your ERP, eliminating manual tracking.

How to Enable:

1. Go to your accounting integration page.

2. On the Plugins tab, navigate to Billing (Invoice) Settings.

3. Open the mapping table.

4. Open Miscellaneous & Administrative Services and map Prepaid funding for services over a specified period to your Asset account (for example, your Prepayment account).

Once configured, all invoices that include new or applied prepaid billing credits will sync automatically into your ERP.

[ACCORDION] What happens if a contract ends early?

Prepaid fees are not fully refundable. However, clients may be able to use their Prepaid Billing Credits toward other services. Please contact Deel support for more details on how unused credits can be applied.

[ACCORDION] Why is the bill in USD?

Deel charges fees in USD, so the fees negotiated in Upfront Billing should be in USD. The Prepaid Billing Credits (PBC) will be held in USD, and there won’t be any FX fees charged when the credits are used toward fees when the client makes payments.

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