Showing how a placement fee was worked out

How a recruitment agency shows the salary basis and agreed fee rate on a placement invoice so the client approves it instead of querying it.

By Achekam · 11 October 2026 · 4 min read · For Recruitment businesses in South Africa, Nigeria, Kenya

A placement invoice arrives in the client's accounts department. It says "Permanent placement fee" and an amount. The accounts clerk has no idea where the amount came from, so she sends it to the hiring manager. The hiring manager remembers agreeing a percentage but not of what: basic salary, total package, with or without the car allowance? He forwards it to HR. Three weeks later the invoice is still unapproved and nobody has paid it.

Placement fees are calculated, and the calculation depends on details the client's finance team was never part of. An invoice that shows its working gets approved. One that shows only a total gets queried.

What clients query on placement invoices

The questions are predictable:

• The salary basis. Basic salary, total annual package, or cost to company including benefits and allowances?
• The rate. Which percentage, and from which version of the terms of business?
• The candidate and the role. Particularly in large clients with several vacancies open at once.
• The start date. Fees are often due on or after the start date, and finance will check it.
• VAT. Whether it is charged, at what rate, and whether the agency's VAT number is on the invoice.
• The guarantee period. What happens if the candidate leaves early.

Answer each on the invoice and most queries never happen. When a disagreement does arise in South Africa, APSO's fee-dispute resolution service adjudicates fee disputes between recruitment agencies and their clients in some cases; it is far better never to need it.

Typing the basis into the line description

In Achekam, invoice lines are typed in rather than picked from a product list. For a placement fee, that is an advantage: the line description can carry the whole calculation in words.

A line description that tends to be approved without a query names:

1. the candidate and the role;
2. the start date;
3. the salary basis, using the same words as your terms of business, for example "first-year annual package as per offer letter";
4. the agreed rate, and the date of the terms of business that set it;
5. a reference to the client's order or vacancy number, if they use one.

Avoid abbreviations only your consultants understand. Write the description once as a template your consultants copy, so that every placement invoice explains itself the same way.

A business creates customer invoices as drafts it can change or delete; issuing one takes the next number in its sequence and posts it to the ledger as debtors, sales and output VAT. Keep the invoice as a draft until the consultant has checked the description against the offer letter, then issue it. Timing is covered in when to issue the placement invoice.

Your VAT number and the Tax Invoice title

A VAT-registered agency enters its VAT registration number in Settings under Firm Profile. Documents made by the server print it, and are titled Tax Invoice only when a VAT number is set.

There is a current defect to know about. The invoice PDF downloaded or e-mailed from the invoice screen is always headed TAX INVOICE and cites the South African VAT Act, whatever the business's country or VAT number. The server's own template handles this correctly; the browser-made PDF on the invoice screen does not.

What this means in practice:

A finance clerk who sees a document that cites the wrong country's VAT law will query it, so raise it with your clients before they raise it with you.

VAT at the rate in force on the invoice date

When an invoice line states no rate, VAT is taken at the rate in force on the invoice date, and a credit note uses its original invoice's date and tax codes. That keeps placement invoices consistent even across a rate change: the date of issue decides the rate.

Nigerian and Kenyan agencies should know that while their country's VAT rate rule awaits platform approval, Achekam refuses to charge standard-rate VAT on their workspace's invoices and tells the user to choose a tax code without VAT or wait. If your placement invoice is refused for that reason, do not code the fee as something it is not; wait, or take advice.

The PDF on your letterhead

An issued invoice can be downloaded as a PDF on the business's letterhead and e-mailed from the invoice, with or without a pay link. A failed send is reported as not sent, so check the invoice afterwards rather than assuming it arrived.

When sending, write a short covering note: the candidate, the role, the start date and a line saying the calculation is shown on the invoice. Send it to the person who approves supplier invoices, and copy the hiring manager. For retained searches billed in stages, each stage invoice should explain itself in the same way; see retained search stages.

A placement invoice checklist

• Candidate, role and start date in the description.
• Salary basis in the words of your terms of business.
• Agreed rate and the date of the terms that set it.
• Client's order or vacancy reference.
• VAT number in Firm Profile, and the heading checked.
• Sent to the approver, copied to the hiring manager, and the send confirmed.

Write your standard placement line description this week, agree it with your consultants, and use it on the next invoice that goes out.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.