What are Late Payment Fees?
Late Payment Fees apply when a client fails to pay an EOR invoice to Deel by the due date.
By default, Deel EOR invoices have a payment term of five days from the issue date for Deel to receive the funds.
Late payment fees apply to both EOR payroll and fee invoices.
Deel issues monthly EOR invoices for all countries at 11:59 PM Pacific Time (PST) on the 23rd of each month.
How Much Do Late Payment Fees Cost?
Late payment fees are charged at 0.15% of the total invoice amount per day.
For example, if the invoice amount is USD 10,000, the late payment fee will be USD 15 per day of delay (USD 10,000 × 0.0015).
When Are Late Payment Fees Charged?
Deel will apply Late Payment Fees (LPFs) under the following circumstances:
- LPFs apply to all clients under a Master Services Agreement (MSA), including those with redlined terms and Net X payment terms.
- LPFs are triggered when a client exceeds the invoice due date. Deel has a seven days grace period.
While Deel provides a seven-day grace period, it is not an extension of the payment terms. Clients are still expected to pay by the due date, and funds must reach Deel within the grace period to avoid late payment fees. Please note that Deel reserves the right to change that grace period.
For example:
- If an invoice is issued on the 23rd of the month, the client has five days to make the payment. After these five days, a seven-day grace period begins.
- If payment is not received within this grace period, LPFs will be charged for each day from the original due date until the payment is received by Deel.
- LPFs are invoiced to the client in the subsequent payment cycle.
If a client incurs LPFs from an October invoice, Deel will review any late payments from October on the last day of the month, October 31st.
An LPF invoice will then be issued on the first day of the month after (November 1st).
Example
If the client was 45 days late paying the October invoice:
- On November 1st, Deel will charge for 30 days of LPFs and issue a standalone LPF invoice
- On December 1st, Deel will charge for the remaining 15 days and issue another LPF invoice for that period
Note: LPFs are not included with the EOR invoice (which is issued on the 23rd). They are always issued separately on the 1st of the month for any late payments from the previous month.