A Teamed case file in cost transparency
Sector: non-profit | Issue: FX markup transparency | Outcome: switched to a contractual zero FX markup guarantee
Details in this story, including company size, geography and figures, have been generalised to protect client confidentiality.
Key takeaways
- A 4 to 5% FX markup buried inside currency conversion, not the headline EOR fee, was what actually pushed this client to start comparing providers.
- Verbal reassurance did not close the deal. A dedicated FX clause in the contract, guaranteeing spot rate conversion and zero markup, did.
- Smaller contract details, payment terms, refund timing, correct fees, VAT treatment, mattered nearly as much as the FX guarantee itself.
- The case is one example of what we call the Three Layers of Opacity in EOR pricing: bundled invoices, hidden FX markup, and unexplained statutory cost variation.
- Total cost of employment, not the advertised per-employee fee, is what actually decides most EOR comparisons.
Most EOR switches start with a number: a fee too high, a service failure, a compliance scare. This one started with a currency conversion line on an invoice that did not add up.
Teamed is the trusted global employment expert for companies who need the right structure for where they are, and trusted advice for where they're going, from first hire to their own presence in-country. This is the story of a client who had been reasonably happy with their existing EOR provider for a year and a half, until they looked closely enough at the FX line to see what it was actually costing them.
The right structure for where you are. Trusted advice for where you're going. Sometimes that starts with something as unglamorous as a spreadsheet.
The situation
The client was a small non-profit organisation with a compact international team spread across a handful of countries. They had been with their existing EOR provider for around 18 months, handling payroll for a small number of employees abroad. Nobody on the team had in-house experience of international payroll, so they relied entirely on their provider's invoices to know what they were paying and why.
For most of that time, the relationship worked well enough. The headline per-employee fee was competitive, arguably hard for anyone to beat on paper. It was only when someone on the team started reading the invoices line by line that a pattern became visible: a consistent 4 to 5% gap between the exchange rate their provider was applying and the rate quoted elsewhere for the same day.
What the FX line was hiding
A 4 to 5% markup sounds small until it is applied to every payroll run, every month, for as long as the relationship lasts. On its own, it will rarely be the reason a company starts a vendor review. It becomes the reason once someone notices it, because a hidden markup raises an obvious question: what else is not being shown clearly?
This is one of what we call the Three Layers of Opacity in EOR pricing. Bundled invoices mix salary, statutory costs and fees into a single number. FX markup is folded into the conversion rather than shown as a line item. And statutory cost variation between countries never gets explained. Most EOR providers are not being dishonest, they are just not being transparent, and for a buyer who has already been burned once, the two can look the same.
What mattered most in the switch
When the client explained what would actually change their mind, cost transparency came up before anything else. They were not looking for the cheapest provider. They wanted to know, invoice by invoice, exactly what they were paying and why, starting with the FX conversion that had triggered the search in the first place.
What Teamed put in writing
Reassurance on a sales call is not a contract. So rather than simply telling the client Teamed's FX pricing was fair, the commitment went through Finance and Legal and was written into the agreement as a dedicated FX clause:
- Conversion at the prevailing spot rate on the invoice date, with no forward rates.
- No FX margin, markup or spread added by Teamed.
- Conversion processed through a provider whose own cost is a small, published fraction of what the client had been paying.
- A minimum notice period before any change of FX provider, with a narrow exception only for regulatory or banking reasons outside Teamed's control.
One deliberate choice: Teamed did not commit to a specific percentage cost of conversion in writing. Advising an exact number would mean promising a spread nobody can guarantee minute to minute. Being transparent about the mechanism, spot rate, zero markup, notice of change, mattered more than a figure that might not hold.
The smaller details that closed the deal
The FX clause was the deciding factor, but it was not the only thing the client raised before signing. Payment terms were adjusted to something the client's cash flow could support. The deposit refund timeline was fixed rather than left open-ended. A pricing line that had been quoted incorrectly was corrected. And because the client's entity is Canada-registered, Teamed confirmed in writing that no VAT applied, since Teamed only charges VAT on UK-entity invoices, and only on the management fee, never on employment costs.
None of these were dramatic on their own. Together, they told the client that what got promised on a call would show up correctly in the contract, which is exactly what they had stopped trusting about their previous provider.
Why this matters beyond one client
Pricing is consistently the biggest reason EOR deals are won or lost, and the deciding factor is rarely the headline number. Providers mostly compete on a visible per-employee fee. Once you look at what actually lands on an invoice, salary, statutory costs, FX conversion, management fee, the honest comparison is total cost, not sticker price.
This is what Cost Clarity means in practice: seeing every cost, every line item, every pass-through, with zero FX markup contractually guaranteed. It is also why the Graduation Model, from first hire to your own presence in-country, only works if the advice along the way can be trusted. A company that cannot see what it is paying today has no reliable way of knowing when it is time to move from EOR to its own entity.
This is not an isolated case. Across the 1,000+ growing teams Teamed has advised on global employment strategy, cost clarity keeps coming up as the difference between a provider that gets kept and one that gets replaced. It is part of why 99% of Teamed's clients stay, and why clients who do leave for another provider often come back within a year.
FAQs
What does FX markup mean on an EOR invoice?
It is the margin some providers add when converting your payroll currency into local currency, on top of the actual cost of the conversion itself. Because it is folded into the exchange rate rather than shown as a separate line, it is one of the easiest costs to miss when comparing EOR quotes side by side. A 4 to 5% markup, as in this case, can add up to a meaningful amount over a year of payroll.
What are the Three Layers of Opacity in EOR pricing?
It's the pattern of bundled invoices, hidden FX markup and unexplained statutory cost variation that make EOR pricing hard to verify. Individually, each layer looks like a minor pricing quirk. Together, they mean a buyer cannot easily tell what they are actually paying for, or compare providers on a like-for-like basis. Asking a provider to itemise all three, invoice by invoice, is one of the fastest ways to see whether their pricing will hold up to scrutiny.
How does Teamed handle FX conversion differently?
Teamed converts at the prevailing spot rate on the invoice date, with no FX margin or markup added, and that commitment is written into the contract. Conversion runs through a provider whose own cost is a small, published fraction of typical EOR markups, and clients get advance notice before any change of FX provider, other than for regulatory or banking reasons outside Teamed's control. For any company paying employees across multiple currencies, this is one of the few EOR costs worth asking a provider to guarantee in writing rather than describe verbally.
When is it worth reviewing an existing EOR provider?
A contract renewal, a compliance scare, or simply the first time someone reads the invoices line by line are the three most common triggers. Most reviews start reactively, after something has already gone wrong or felt off. The strongest reviews happen proactively, on a schedule, rather than waiting for a problem to force the question. If nobody on your team could currently explain every line on your EOR invoice, that is usually a sign the review is overdue.
How disruptive is it to switch EOR providers?
For a small team, a switch can be completed in a matter of weeks without interrupting pay or benefits. In this case, the client preferred a transfer of accrued rights over a resign and rehire approach, specifically to protect continuity of existing benefits, and that preference shaped how the migration was planned. The detail that matters most is agreeing the transition approach, transfer versus resign-rehire, before signing, not after.
Does a lower headline EOR fee always mean lower total cost?
Not necessarily. Salary, statutory costs, FX conversion and management fees all affect the total, and any one of them can outweigh a lower headline rate. Teamed's own pricing is published at $599 a month per employee, the same headline as some competitors, with the difference showing up in what is and is not itemised underneath it, including a contractual zero FX markup. Comparing total cost of employment, not just the advertised fee, is the only reliable way to know which provider is actually cheaper.
Talk to an expert
If an invoice does not fully explain itself, that is worth a second look, whether or not you are planning to switch anything. Teamed publishes FX conversion at the prevailing spot rate, with zero markup, on every invoice, and backs it with named jurisdiction specialists across 187+ countries for EOR and 100+ countries for entity formation.
The right structure for where you are. Trusted advice for where you're going. Talk to an expert about what is actually in your current EOR invoices.