Beyond the monthly fee, what do you pay when an EOR employee leaves?

Summary

Mostly you pay what local law and the employment contract owe the employee, and that can dwarf the EOR's own fees. Making a 35-year-old in the UK redundant after six years on £900 a week costs about £9,900 in notice pay and statutory redundancy pay before any unused leave. The EOR decides when you pay it: Deel bills a monthly severance accrual in about 60 countries, while Remote says on its pricing page that it doesn't collect one.

A UK redundancy, priced out

Take an employee who is 35, has six full years of service, and averages £900 a week.

• Notice. GOV.UK sets statutory notice at a week for every year of service between two and 12 years, so six weeks. Six weeks at £900 is £5,400, paid as notice pay or as a payment in lieu of notice, with tax and National Insurance deducted.
• Statutory redundancy pay. Employees with two or more years of service qualify. Each full year between ages 22 and 41 earns one week's pay, but weekly pay is capped at £751 for redundancies on or after 6 April 2026. Six years at £751 is £4,506.
• Total. £9,906.

The same page caps countable service at 20 years and the payment itself at £22,530. Years worked under 22 count for half a week each, and years at 41 or older count for one and a half.

Pay as you go, or pay at the end

Deel's severance accrual exists, in its words, "to protect our clients from large final invoices." In countries on its list, the monthly invoice carries an extra charge toward the severance the law will require. If an employee would be owed one month of severance per year of service, Deel invoices one twelfth of a month's salary each month, which is $500 a month on a $6,000 salary.

At termination the accrual is netted against the final invoice. A shortfall is billed; a surplus is refunded. If the employee resigns, the whole accrual comes back to you. Deel keeps this separate from the EOR deposit, and the UK and US are not on its list of about 60 countries.

Remote takes the other route. Its pricing page says other providers charge extra deposits for things like "incentive plans and monthly severance accruals. We don't." It asks for a reserve only when it judges the case high risk, which it calls rare.

What the provider itself charges

Remote's help article says a termination may need outside legal advice depending on the country and the contract, and that you will be told about any additional charges before Remote proceeds. It gives no standard turnaround because the variables differ case by case. Hire with Columbus states on its pricing page that there are "no contract termination fees."

At Deel, the termination process itself "can take up to 60 days," and the deposit comes back within 60 days after that process is complete and every invoice is paid, less anything netted against the final bill.

Sources

• https://www.gov.uk/staff-redundant/giving-staff-notice
• https://www.gov.uk/redundancy-your-rights/redundancy-pay
• https://help.letsdeel.com/hc/en-gb/articles/12080901688593-About-Severance-Payment-Accrual-for-EOR-Employees
• https://help.letsdeel.com/hc/en-gb/articles/4419482456721-About-EOR-Deposit-Refunds
• https://remote.com/pricing
• https://support.remote.com/hc/en-us/articles/4411585179661-How-can-I-terminate-an-employee
• https://hirewithcolumbus.com/pricing/

Related on this site

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• What does an EOR charge you on top of the monthly fee?
• What does an employer of record actually take off your hands?
• What the employer cost figure leaves out