To better understand how our exchange rates work, we'll breakdown how we pay your international team with Deel.
How do we pay your international team in their local currency?
Well, we make paying your international team easy. 120 currencies easy. All you have to do is fund Deel's payroll using your preferred currency. After that, we make the funds available to your team on their payday. Once they have their funds, they can choose to withdraw in their local currency of choice using whatever payment method they'd like. Here's an example to better illustrate:
Say you have a company located in Paris, but your team's in Colombia. You have euros, but want to pay them in pesos on the 30th of each month.
To make this happen, you'll need to fund the payroll a few days before your team's payday to ensure everyone gets paid on time. Meaning, we'd send an invoice to fulfill the payroll in euros on the 25th of each month. Then, on the 30th of each month, your team gets paid in pesos. It's as simple as that.
P.S. Invoicing a few days before payday is very common for payroll.
Okay, but what will my exchange rate be?
Glad you asked (or didn't). Since the exchange rates frequently fluctuate, we've accounted for this by building it into your invoice. That means we take into account the exchange rate on the 25th and the 30th of the month.
For example, the EUR/COP exchange rate on the 25th of the month was (x), but on the 30th it was (y).
In this case, the rate you're given accounts for the five days between the 25th and the 30th. By building the amount into your invoice, we can account for the exchange rate fluctuation, so there are no surprises on your end. The value we forecast from this period is what we like to call your "Forward Rate".
How does this compare to transferring straight from my bank account?
In short, it's a lot easier. It essentially makes sure your team gets paid the correct amount, on time, each month. Plus, most banks will charge between 3-5% on an exchange rate when transferring abroad, along with a fixed fee per transfer. On top of that, there's no guarantee the money will get there on time.
My team wants to be paid in a contract currency that's not yet on Deel
Contract currency is the currency the client and contractor have agreed on as the form of payment. Settling on a contract currency usually happens during the negotiating process, right before the contract is signed.
Chances are you'll have a team member that wants to receive their payment in a different currency than the contract states. We currently support 35 contract currencies, but we also partner with some of the best payment providers like Revolut, Transferwise and Payoneer so your team can get paid in 120+ currencies at the best available rate.
So building on the previous example, you could have someone on your team in Costa Rica working under a USD contract, but they want to get a CRC payment. In this case Transferwise, as our payment service provider, would process the CRC payment, disclosing all rates and fees to your team before the payment request is finalized.