Why can the fees and payroll change month?

This is one of the most common questions asked by our clients, but luckily it has one of the most straight-forward answers. 


The most common answer to this question is: foreign exchange rates (FX rates). 


The currency we bill our clients in is always determined in the Terms & Conditions section of the signed Proposal (see below).



In the above example, all invoices sent will be in euro (EUR). However, if our clients have employees in any countries which do not use euro as their currency, Horizons will need to convert the various amounts in local currency to euro. 


See below example of a payroll invoice:

  1. Manuel & Natalie are both based in countries which use euro. The various amounts (recurring income, employer burden and financial charges) are expected to be the same each month, unless there is a reason for the amounts to change, e.g., salary increase would increase recurring income, employer burden varying slightly from month-to-month, etc. As business expenses are ad-hoc charges, they will not necessarily be recurring each month. 
  2. Laura & Marko are located in Turkey & Croatia respectively. Since euro is not an accepted currency in either country, Horizons takes the current FX rate on the date the invoice gets generated and converts the amounts from the local currency to euro.


Laura's calculations: 

  • Recurring Income: 3,664.93 / 0.05469 = TRY 67,012.80 gross/month
  • Employer Burden: 464.49 / 0.05469 = TRY 8,493.14 gross/month
  • Financial Charges: 28.99 / 0.05469 = TRY 530.00 gross/month


Marko's calculations:

  • Recurring Income: 6,520.57 / 0.1328019 = HRK 49,100.00 gross/month
  • Expenses: 535.19 / 0.1328019 = HRK 4,030.00 (ad-hoc)
  • Employer Burden: 1,075.89 / 0.1328019 = HRK 8,101.47 gross/month
  • Financial Charges: 46.48 / 0.1328019 = HRK 350.00 gross/month


As FX rates are continuously fluctuating, it is to be expected that the above FX rates in the next month (M+1) will be different. However, once the new FX rate is applied to the respective amounts in the invoice, the amount in local currency will be consistent on a month-by-month basis. 


Note: the employees' payroll information can be viewed and verified in the platform. After login, select "Pay" > "Report" on the panel on the left-hand side. 


We hope you found this article to be useful. Please contact [email protected] should you have further questions.  


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