Why is a deposit required?

An employment deposit, sometimes referred to as Debit Note, is a refundable charge we invoice once the employment contract for the employee has been signed.

The deposit is held for the duration of the employee's employment with Horizons and the purpose is to be able to offset any cost arising from employment liability, since Horizons assumes all employment liabilities from you, our client.

The deposit consists of two elements: employee's regular gross monthly income + anticipated employer burden*

*Since the employer burden will only be confirmed once the first payslip has been created, we use an estimation for the purpose of calculating the deposit. This estimation is not necessarily the employer burden which will be charged in the employee's first month of employment, or subsequent months and is used purely for the deposit calculation.

The number of deposits charged can always be found in the signed Proposal and further information about the deposit, its calculation, usage and refund terms and conditions can be found in our Master Services Agreement.

Example of a calculation:

Below is a screenshot from the Proposal of the number of deposits charged, i.e. two (2) month's total cost of employment.

This employee is hired in Germany and has a gross monthly salary of €5,000, as well as gross monthly car allowance of €400. The employee is entitled to receive an annual commission of €10,000.

Calculation:

The regular gross monthly income = €5,400 gross

The annual commission is not included, since it is not fixed or guaranteed

Anticipated employer burden = €1,113.75

Total cost of employment = €5,400 + €1,113.75 = €6,513.75

Total deposit (2 months) = €6,513.75 * 2 = €13,027.50

We hope you found this article to be useful. Please contact support@joinhorizons.com should you have further questions.

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Why is a deposit required?