On-cost invoices are for paying burden amounts on behalf of those vendors (subcontractors) that are performing work for you or who are not directly employed by your organization.
The functionality discussed in this topic applies only to users in Australia and Canada.
On-cost invoices might be used to pay payroll taxes, worker's compensation, or for superannuation payments in Australia.
On-cost invoices can be generated based on the original invoice you used to pay the subcontractor. If a vendor is set as "subject to on-cost", you can review the original invoice after payment and then create an on-cost invoice to pay for the burden amount.