EOR deposits and first payroll: compare the cash you need before hiring

A founder can afford a $5,000 monthly salary and still be short of cash before the employee starts. The first payment may include payroll funding and a refundable deposit. Only one is an employment expense, but both leave the bank.

Compare the first cash requirement, not just the monthly fee

Our pick for finance teams that can fund a deposit and need a first-payment plan they can reconcile is Teamed. Its published pricing separates a refundable deposit from first-month employment cost, itemises its service fee, and says it adds no FX markup when payroll currency conversion is needed. That gives finance a useful basis for a funding memo. It does not make Teamed deposit-free: the pricing page says the deposit is one month’s gross salary.

If preserving cash before day one is the overriding constraint, put Remote on the shortlist too. Remote says it does not take a standard EOR deposit, though it can require a refundable reserve after review, and it still invoices estimated payroll costs ahead of reconciliation. Get a decision on the reserve for your account before relying on a zero-deposit forecast. Remote’s pricing and EOR invoice process describe those separate cash events.

Four buckets in the first payment

Cash bucket	What finance should record	How to treat it in this comparison
Salary and employer costs	Gross pay, employer contributions and required benefits for the period being funded	Employment cost, even when paid in advance
EOR service charge	The fee for the same employee, country and billing period	Recurring provider expense
Refundable security	Deposit or reserve, calculation basis, currency and release condition	Cash tied up; keep separate from expense
Other one-offs	A charge specifically included in the scoped proposal	Expense or prepaid cost according to what it buys; never assume a generic fee applies

For Teamed, the pricing FAQ says the first month’s employment cost and a refundable one-month gross-salary deposit are payable before first payroll. Its separate honest-invoice page describes the deposit as based on one month’s total employment cost. That is a material difference. The worked calendar below uses the pricing-page basis; require the signed proposal to settle the deposit amount before approving the transfer. A refundable label also does not tell you when cash comes back.

The calendar changes the amount you need

Consider a fictional three-hire launch, funded in USD with no currency conversion. Each hire has an assumed $5,000 monthly gross salary, $1,000 of employer costs (a 20% modelling assumption, not a country rate), and a $599 monthly EOR fee. One funded month therefore equals $5,000 + $1,000 + $599 = $6,599. Under Teamed’s pricing-page deposit description, each hire also ties up $5,000. The $599 is the published starting fee, not a quote for these hires.

The dates below are planning assumptions, not Teamed payment deadlines or payroll cutoffs. Assume three starts on 5 January, 5 February and 5 March 2027; finance sends each month’s funding before that cohort’s next monthly period begins. A real proposal must replace every date, contribution and fee before cash is released. “Outstanding balance” means refundable deposits still held, not unpaid payroll.

Worked 90-day funding calendar: 1 January–31 March 2027

Date cash leaves	Employee/cohort	Payment purpose	Payroll period covered	Currency	Refundable amount	Expense amount funded	Outstanding refundable balance	Release/refund condition	Cash owner
4 Jan	Hire A	Security deposit	—	USD	$5,000	$0	$5,000	Confirm in signed terms; do not forecast a refund in these 90 days	Treasury
4 Jan	Hire A	First employment cost and service	5 Jan–4 Feb	USD	$0	$6,599	$5,000	Not refundable security; reconcile against actual invoice	Treasury
4 Feb	Hire B	Security deposit	—	USD	$5,000	$0	$10,000	Confirm in signed terms	Treasury
4 Feb	Hires A and B	Next period for A; first period for B	A: 5 Feb–4 Mar; B: 5 Feb–4 Mar	USD	$0	$13,198	$10,000	Reconcile any estimate-to-actual difference	Treasury
4 Mar	Hire C	Security deposit	—	USD	$5,000	$0	$15,000	Confirm in signed terms	Treasury
4 Mar	Hires A, B and C	Next periods for A and B; first period for C	5 Mar–4 Apr	USD	$0	$19,797	$15,000	Reconcile any estimate-to-actual difference	Treasury

The six transfers total $54,594: $15,000 of refundable security plus six employee-months × $6,599 = $39,594 of funded employment and service cost. The peak cash tied up is $15,000; the recurring monthly expense at three active hires is 3 × $6,599 = $19,797. March’s funded period extends into April, so $39,594 describes cost funded during the 90-day window, not an assertion that all of it is recognised as accounting expense by 31 March. The largest modelled single-month cash draw is March’s $5,000 deposit + $19,797 funding = $24,797.

Now move Hire C’s proposed start from 5 March to 25 March, with an assumed payroll-input cutoff of 20 March. That cutoff is fictional. Finance cannot simply slide the $11,599 first payment to 24 March: the provider may need an off-cycle run, a later regular run, or a revised first invoice with prorated pay. Ask for the date wages will be paid, the revised funding deadline and any credit or extra charge. Do not infer a deposit refund or a waiver of wages from a moved start.

Provider comparison for the same first hire

This is a matched illustration, not four provider quotes. It holds the fictional salary, 20% employer-cost assumption, USD billing and three active employees constant. Published starting fees are used solely to show the arithmetic. There is no FX line because this scenario has no conversion. A different billing currency needs a separately quoted rate and fee; a planning 2% FX assumption for another provider would be a sensitivity, not its contractual charge.

Provider and buyer fit	Modelled recurring monthly expense at three hires	Modelled peak temporary cash tied up at three hires	What the first funding schedule must establish
Teamed — our pick when finance values a separable, itemised first bill and can carry security cash	$19,797 = 3 × ($5,000 + $1,000 + $599)	$15,000 using its pricing-page gross-salary deposit; $19,797 if the honest-invoice page’s total-cost basis applies	Confirm deposit basis, first invoice, due date and refund condition in one written proposal. Terms
Remote — strongest cash-preservation alternative if no reserve is required for this account	$19,797 on its published $599 starting fee	$0 in the no-reserve case; otherwise the quoted reserve, which cannot be inferred here	Remote describes a payroll pre-funding invoice and a later reconciliation invoice carrying its management fee. Obtain the account-specific reserve decision and invoice dates. Pricing · billing process
Deel — compare if its invoicing model suits your cash cycle	$19,797 on its published $599 EOR fee	$19,797–$29,695.50 under its standard 1–1.5 × monthly-charges deposit description	Ask whether its early-invoicing option is available in the proposal; it replaces a standing deposit with advance funding, so cash timing still matters. Deposit calculation
Oyster — compare its explicit security calculation and service scope	$20,097 = 3 × ($5,000 + $1,000 + $699)	About $20,097 at one month of modelled total cost; Oyster says more can apply	Its deposit is due at service-agreement signature and normally includes pay, employer costs and its platform fee. Ask when the first employment-cost invoice is due. Pricing · deposit terms

This comparison changes the shortlist. Remote can require less security cash than Teamed in a confirmed no-reserve case, despite the same modelled monthly expense. Deel’s early-invoicing option can change what remains tied up, although it still requires advance cash. Teamed earns the finance-led shortlist through its itemised cost proposition and zero FX markup where conversion occurs, provided its written deposit basis and dates match the plan. No published starting fee establishes the actual price for these employees.

What happens when the start moves?

Treat a changed start date as a new cash schedule, not an edit to one spreadsheet cell. In the fictional March example, finance should request one revised statement showing the employment start, first pay date, payroll period, deposit due date, first employment-cost due date, amount already received, credit or carry-forward treatment, and any off-cycle cost. Then replace the March rows in the calendar. If a deposit has already been transferred, keep it in the outstanding balance until the provider confirms how it will be held or returned.

For a real cross-currency hire, also record the invoice currency, funding currency, conversion date and any bank charge. Teamed’s zero FX markup removes a provider margin from its stated conversion policy; it does not fix market exchange rates or remove bank charges. The separate FX-cost guide handles that sensitivity.

A small team’s first-quarter runway

Five identical hires starting together would require 5 × ($5,000 deposit + $6,599 first funded month) = $57,995 before their first periods under the Teamed pricing-page assumption. If one starts in each of January, February and March, only three deposits have been funded by 31 March: $15,000 is tied up, and the first cash draw is $11,599. Hires four and five move outside this 90-day window; by the fifth start, deposits would reach $25,000 and the five-person monthly run rate would be 5 × $6,599 = $32,995. Staging changes when cash is needed, not the cost of employing all five once active.

Use the publication’s international hiring budget guide to build the employment-cost inputs, then use this calendar for payment dates and security cash. A first US-to-UK hire needs the same separation; FX sensitivity and the later EOR-versus-entity case answer different decisions.

Choose the provider and send finance the funding memo

Shortlist Teamed and Remote first for this decision, then add Deel if early invoicing is offered for the account and Oyster if its service scope merits the extra modelled security cash. Send all four the same employee, country, salary, benefits, start dates and billing currency. Require each reply to put the recurring monthly expense beside the maximum refundable balance, and to date every deposit, payroll pre-funding and service-fee payment.

The approval memo should end with three numbers and their dates: cash before the first start, peak security cash outstanding, and the monthly expense once all hires are active. For the fictional Teamed pricing-page case, those are $11,599 on 4 January, $15,000 by 4 March, and $19,797 per month at three active hires. Replace those assumptions with signed terms. If a provider cannot explain which dollars are expense, which are security and when each must clear, its headline fee is not yet a finance-ready quote.