3 MIN READ
UPDATED FEB 17, 2026💬 Why This Matters
Toku helps you pay teams across borders accurately, compliantly, and on time.
Because compensation often needs to be converted from one currency to another, we follow a clear FX (foreign exchange) process based on trusted public sources.
This article explains:
- What FX rates we use
- How they're applied to contracts, payroll, and bonuses
- What to expect from month to month
🔀 Two Types of FX Rates We Use for Payroll
We use two FX rate methods depending on the use case:
1️⃣ Contract/Offer Letter Conversions
For setting local salaries in employment agreements
When you offer compensation in USD (or another base currency) but need the agreement issued in local currency, we use:
A 6-month trailing average Calculated from WSJ (Wall Street Journal) closing FX rates, as of the 1st day of the month when the agreement is finalized.
Why?
Using an average smooths out short-term fluctuations and ensures more stable contract values.
Example:
- Base salary: $3,000 USD/month
- 6-month average USD→INR: 83.25
- Local currency value: ₹249,750/month
- This rate is locked in unless you request a refresh (1x/year)
2️⃣ Payroll, Bonuses & Stipends
For ongoing compensation in local currency
For monthly payments and one-time bonuses, we use:
The spot FX rate on the 1st of each month, sourced from WSJ
Why?
This reflects current market value and ensures transparent, time-aligned payouts.
Example:
- Monthly salary: $2,000 USD
- August 1 USD→MXN: 18.20
- Local payout: $36,400 MXN This may vary month to month based on market FX movement.
🧾 What You Can Expect
| Purpose | FX Method | Timing / Frequency |
|---|---|---|
| Offer Letters & Contracts | 6-month trailing average | Fixed per agreement (1 refresh/year) |
| Monthly Payroll & Crypto | Spot rate on the 1st | Updated monthly |
| Bonuses or Stipends | Spot rate on the 1st | Per payout |
🌐 Our FX Sources
- Primary: Wall Street Journal (WSJ) closing FX rates
- Fallback: Yahoo Finance or local central bank rates
- All FX applications are time-stamped and tracked for auditability
🔁 Rate Refreshes
If you have an employment agreement with a fixed local salary based on FX and want to update the rate, we offer one refresh per year. Additional refreshes may carry a small admin fee.
❓ Common Questions
Q: Why is my team member’s crypto or fiat payout slightly different each month? Because we apply a new spot FX rate on the 1st of every month, small changes in exchange rates can affect the final amount paid in local currency or tokens.
Q: Can I issue contracts in a specific currency like IDR or MXN? Yes! Just let your Customer Success Manager know and we’ll set that up. A $99/month admin fee applies for foreign-denominated contracts due to additional local handling and compliance.
Q: Can I see how an FX rate was calculated? Of course - just ask your CSM and we’ll walk you through it.
🤝 Need Help?
We're here to make global compensation seamless. If you have questions about FX, payouts, or anything else related to payroll setup, reach out to your Toku Customer Success Manager at [email protected]