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Our users often ask us about Deel's payment flow and what's happening "behind the scenes". As we deeply value transparency, we wanted to write this detailed explanation. Enjoy :)
What happens before the payment is made?
Each contract has what we call payment cycles. In other words, it means that each contractor gets paid on a set frequency. Payment cycles can be weekly, bi-weekly (every two weeks), semi-monthly (twice a month), and monthly.
Let's say a contractor is paid monthly on the 30th of each month. That day is considered the payday. Five days before the payday, so on the 25th of each month, the client can release the payment. We do this so that regardless of the client's payment method, the contractor gets their money on time, by the payday.
What does payment processing mean?
If the client has paid on time, the contractor will see money on their balance on the payday in their local timezone. If the payment was done late and didn't clear by the payday, the status will change to "payment processing" until it clears.
How do withdrawals work?
When the money is cleared, we update the contractor's balance, and it is then available for withdrawal. That's when the receipt is created and stored on the contact page. Depending on the withdrawal method, it may take some time for the money to clear again. Unless you are withdrawing via a SWIFT bank transfer, it usually takes one business day for the funds to appear on your account. We do payouts in batches, three times a day.
What's the processing time of withdrawals?
There are two different ways we process bank transfers: local payouts, SWIFT transfers (which we talked about before).
Local payouts and international non-SWIFT transfers are quite fast and usually take 1-2 business days. If it takes longer, reach out to us, and we will provide you with an MT103 document to give to your bank for reference. If the transfer is going through SWIFT, there is no definite way of knowing when it will clear, as banks have different intermediary networks.
Some payment methods are faster than others, but to keep a streamlined flow and respect contracts/invoices, we always aim to make the balance available on the payday.
What is Withdraw Early feature?
A few days before the payment is due, the contractors will see a button Withdraw Early on the contract page. This feature ensures instant pay (funds releasing), even on weekends and holidays. This feature is currently available for our VIP users, but we are working on expanding it to everyone. Please note that there is a 1% fee, but never more than $15. This fee doesn't include the payment method fee that might occur.
What are Off-cycle payments?
Off-cycle payments are the payments done outside of the regular cycles set in the contract. The client can issue an off-cycle payment at any time. The payment clearing process is the same as any other payment through Deel. Since there is no payday, the money is available as soon as it's cleared.
Why are there transfer fees?
Some payment methods charge transfer fees. Deel never takes any fees and works on partnerships with payment providers to lower them. All fees will be displayed after initiating the withdrawal process. You will see exactly how much the transfer fee is before you confirm the request.
Here's an overview of the fees:
- Transferwise local transfers
- Payoneer charges 1% with a minimum of $12
- PayPal charges Deel users a reduced rate of 2.5% globally
- SWIFT fee (international bank transfer) depends on the banks and the payment networks they use. We cannot give an estimate there.