Invoices Categories
Learn how to differentiate invoices categories
Here are some common categories of invoicing and a brief overview of each:
Cluster
Description
13th/14th salary
All additional salary payments, related to the 13th and 14th salaries, along with any related accruals and extra payments distributed over 12 monthly installments.
Accruals
Accruals required to be built up for potential future payments.
Accrued Vacation / holiday
Accruals accumulated for potential future payments related to vacation, paid time off (PTO), or other paid absences, to reflect the liability for time employees are entitled to but have not yet taken.
Accrued severance deposit
Accrued severance deposit amounts accumulate throughout the course of employment and are intended to cover potential severance payments in the event of termination. If a positive balance remains at the end of employment, it will be refunded, either partially or in full.
Advanced Payment
Any pre-paid amount provided to employees, such as salary advances or expense reimbursements, before the actual service or expense occurs.
Allowances
Fixed or variable payments provided to employees to cover specific work-related expenses, such as food allowance, remote, pension or meals.
Annual Insurance Coverage Costs
This includes all annual payments to insurances.
Back pay & Salary adjustment
Adjustments made to a salary component for a previous period, reflecting corrections, updates, or changes to the employee's pay.
Base Salary
Fixed sum of money, paid on a regular basis (typically monthly) for the services the employee performs.
Benefits
Non-wage compensation provided to employees, intended to improve employee well-being and job satisfaction.
Bonus
Extraordinary payments made to compensate or reward employees for their performance or contributions. Examples include sign-on bonuses, reported bonuses, and contractual bonuses.
Commission
Performance-based payments, typically tied to sales or specific targets.
Compensation
Payments made to employees in exchange for their work, including additional payments for extra work, such as overtime.
Deposit
A sum of money paid in advance and held as security for potential future obligations. Refundable upon fulfillment of terms or conditions.
Expenses
Reimbursements made to employees for extraordinary expenses incurred, such as travel or other costs. This also includes expenses paid as taxable allowances or bonuses, grossed-up to account for applicable taxes.
Late Payment Fee
Charges applied for payments made after the invoice due date.
Legal and Professional fee
Charges for legal services or professional consultations related to specific cases, including attorney fees and expert advisory costs.
Medical check
Costs associated with employee medical examinations, including pre-employment or routine health checks.
Off-Cycle Fee
Fee charged for processing payroll changes or adjustments reported after the designated cut-off date.
Payroll change fees
Charges associated with payroll changes reported, such as expense review fees or gross-up calculations.
Registration fees
All fees related to the registration of an employee, such as those for work permits, social security, and other mandatory employee registrations.
Service fees
Monthly fees charged for providing Employer of Record (EOR) services
Severance & Termination Settlements
Payments made to employees upon or after the termination as financial or benefits package (e.g., severance pay and/or settlements)
Social costs & insurances
Mandatory employer costs, including insurance contributions (e.g., health, sickness, accident, travel insurance and accruals of payments for all insurances) and pension contributions, as well as any other legally required employer costs.
Subsequent Adjustments
Adjustment of a payroll component from a previous month
Termination Fees
Costs incurred when ending the employment relationship itself, including penalties and administrative costs.
Transaction fees
Fees associated with bank transfers and foreign exchange (FX) transactions, including charges for processing payments and currency conversion.
Vacation / temporary leaves
All types of vacation and temporary leave, including maternity, paternity, sick leave, and holidays, as well as any unpaid paid time off (PTO) accrued at the time of termination.
Visa & Form Application
Fees associated with application forms, including costs for travel-related documents (e.g., A1 applications) and visa processing.
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