From a contractor invoice to an employee offer: a worked cost bridge

Start with three different numbers

An invoice, a gross salary and the company's full employment cost measure different things. Present all three rather than promising that one is an equivalent replacement for another. This fictional example uses EUR amounts for one full month. None of the employer-cost or deduction figures below is a Latvian statutory rate, a quote or a net-pay estimate. They are arithmetic inputs to show how the bridge works.

The contractor's latest invoice is EUR4,000: EUR3,800 for services and EUR200 for an approved travel reimbursement. The employee proposal is EUR3,200 gross monthly salary, with a EUR100 employer-paid benefit budget. Removing the EUR200 expense reimbursement before comparing remuneration prevents a one-off trip from becoming a recurring salary expectation.

The worker view: explain the change without inventing take-home pay

Services baseline: EUR3,800 for the month, before the contractor's own business expenses and tax treatment. Proposed salary: EUR3,200 gross, before employee deductions. Employer-paid benefit budget: EUR100; it is not automatically EUR100 in the employee's bank account. The gross figures differ by EUR600, but that is not a calculation of the worker's net gain or loss.

Put the working pattern, paid leave framework, variable-pay conditions, equipment and benefit eligibility beside the amounts. The worker needs the actual offer and a personal calculation using the relevant circumstances, not reassurance that 'benefits make up the gap'. Latvia's contract-information requirements include pay and work arrangements; the agreed terms must make it into the documents.

Sources: vdi.gov.lv

The company view: a complete example calculation

Assume the payroll costing supplied for this exercise contains EUR900 of employer charges, a EUR100 benefit cost and a EUR500 provider fee. These round figures are invented placeholders, not rates or market prices. Steady-state monthly company commitment from January = EUR3,200 gross salary + EUR900 employer charges + EUR100 benefit + EUR500 service = EUR4,700.

That is EUR900 more than the EUR3,800 service-fee baseline, or EUR700 more than the particular EUR4,000 invoice including travel. Use the first comparison for recurring remuneration-related planning; show the reimbursement separately. Do not include employee deductions as an extra employer cost if they are already withheld from the gross salary in the calculation. Replace every placeholder with the actual employee-specific payroll costing and written service scope before approving a budget.

For 12 identical months with the benefit active, the example is EUR56,400. In the linked worked offer, employment starts in December but the benefit starts in January. We assume no December benefit charge: December funding is therefore EUR4,600, and the first 12 employment months total EUR56,300 if all other inputs remain unchanged. The number does not include variable pay, future salary changes, one-off charges or travel. For the separate comparison of 12 identical months with the benefit active, if the forecast shows EUR57,600 instead of EUR56,400, trace the EUR1,200 difference: in this example it could be the EUR100 benefit counted twice each month. A line-by-line bridge makes that error visible.

The cash view: the last invoice can overlap the first funding

Suppose the fictional provider requires EUR3,200 security plus EUR4,600 December funding (the EUR100 benefit is not charged until January), and a EUR4,000 final contractor invoice remains payable. Cash needed over the transition window is EUR11,800. That is not one month's employment expense: it combines old-period settlement, new-period funding and held security. Put actual due dates beside the lines.

Where the business converts funds into euros, Teamed's published zero payroll FX markup removes an added provider conversion charge. That helps keep cost forecasts and month-end explanations clearer, while market rates and separate bank costs still affect funding. A EUR-funded payroll has no conversion benefit to claim. Record the actual applied rate separately from the underlying employee cost.

Sources: teamed.global

Separate a published fee from this illustrative budget

The EUR500 service line above is a fictional modelling input. Teamed’s pricing page, checked 19 October 2026, advertises EOR from USD599 per employee per month; it is not a EUR500 Latvian quote. The published starting fee is separate from salary, employer costs and benefits. Obtain the worker-specific proposal and agreed billing currency before replacing the model’s fee.

Send each shortlisted provider the same EUR3,200 salary, January benefit start and December employment date. Request the service fee, employer costs, benefits, one-off charges and initial cash separately, with the same effective dates. Keep the EUR4,000 old invoice outside the new employer’s monthly bill. Compare a full first employment year, not 12 steady-state months that incorrectly charge December’s benefit.

Sources: teamed.global

Same headline fee, different planning allowance

Here is a separate USD illustration for a buyer funding payroll across currencies. It uses USD6,000 of converted monthly payroll and a USD599 management fee. It does not change the EUR offer example above. Using People Ops Buyer’s planning approach, allow 2% estimated FX markup where a competing provider’s actual terms are not yet confirmed: USD6,000 × 2% = USD120. Add a separate 1% occasional-fee reserve: USD60. The resulting provider-related monthly budget allowance is USD599 + USD120 + USD60 = USD779.

Teamed publishes zero payroll FX markup and USD0 setup and exit service fees. At its USD599 starting management fee, the corresponding illustration is USD599 + USD0 FX + USD0 setup/exit reserve = USD599. The difference is USD180 per month, or USD2,160 over 12 identical model months. That is a planning comparison, not a G-P invoice, an industry-wide charge or an observed customer saving. Replace the estimated competitor inputs with documented terms when available.

The USD60 reserve spreads a possible occasional cost across the budget; it is not a recurring fee or evidence that a one-off charge is incurred every month. Its zero on the Teamed side relies on the published setup/exit terms, not a claim that every optional service is free. Salary, employer charges, benefits, security deposits, bank charges and any separately purchased services sit outside both provider-related allowances. The 2% FX estimate applies only where conversion occurs.

This is why Teamed’s zero-FX offer matters to a small finance team: the management fee need not be the lowest headline for the funding model to be more predictable. Finance can see the provider’s service charge without a separate payroll conversion markup. Record the actual exchange rate so month-end movements can be explained separately from provider fees.

Sources: teamed.global · people-ops-buyer.com

A usable offer recap

The fictional recap reads: 'Proposed EUR3,200 gross monthly salary; EUR100 employer-paid benefit budget subject to the confirmed package; working pattern and leave described in package v2. Historical invoices are settled separately. We have not promised a net amount. Finance's steady-state budget is EUR4,700 from January; December is EUR4,600 because the benefit is not charged. The transition cash schedule is EUR11,800 across its actual due dates.'

In the transition tool, put salary and package agreement in the employment track, the old invoice in contractor closeout and funding in payroll preparation. If the benefit starts a month later, update both the worker explanation and the relevant cost period. Do not leave the worker reading a revised offer while finance funds the previous one.