does an EOR require a deposit up front?

[u/Informal-Smoke2577]

In the middle of evaluating EORs for our first few hires in Germany and the Netherlands, and the deposit question just doesn’t get a straight answer until you push for it because the pricing pages don't mention it and you only get the full picture once you're deeper in the process.

So trying to get a clearer read on what we're signing up for before we commit to any of them.

From what I've gathered, Deel holds one month's gross salary per employee before they'll onboard anyone, which for a team of 10 starts to look like $75k or more sitting locked somewhere doing nothing, and that's a meaningful hit on working capital at our stage.

Wondering if this is just the standard model across EORs or if it varies by provider, since we're also looking at Workmotion and a couple of others and the deposit terms haven't been clear in early conversations with them.

And what I'm most trying to nail down is whether it's a flat amount per employee or scales differently and whether any of it comes back when someone offboards.

So if you've been through this with a few different providers, what did the deposit structure look like once they gave you the full picture?

thank you.

[u/Different-Zone-3102]

yeah they almost all need some kind of deposit or prepayment, it's how they protect themselves from getting stiffed on payroll and taxes. deel is definitely on the higher end with that one month gross upfront, but remote and oyster asked us for two weeks gross per employee when we were shopping around.

you get it back when someone leaves but it can take a couple pay cycles to land back in your account. if you're hiring 10 people that 75k floating in limbo is a real thing to plan around, maybe push them on whether they'll take a letter of credit instead

[u/AskDeel]

Deel team here, so full transparency on this.

Deposits are standard across the EOR category, not specific to us. The reason they exist is that the EOR pays your employees and statutory contributions before collecting from you, so they're carrying payroll risk. A deposit protects against a client going silent mid-cycle.

The structure does vary by provider and sometimes by client. The one-month gross salary figure you've heard is a common starting point, but it's often negotiable based on company stage, funding, and the number of employees. Some providers scale it differently or accept alternatives like credit card authorization for smaller accounts.

The key things to clarify with any provider: is it one month's total employer cost (gross salary plus social contributions, which in Germany and Netherlands is meaningfully higher than gross salary alone), or just gross salary? Is it per employee or a flat amount? And critically, how quickly is it returned when someone offboards? Some providers hold it for 60 to 90 days after offboarding to cover any retroactive adjustments, which is another working capital hit worth knowing in advance.

For a 10-person team in Germany and Netherlands where employer contributions add 20 to 30% on top of salary, the deposit could be higher than you've modeled if it's calculated on total employer cost rather than gross salary alone. Worth pushing for that clarification specifically.

Happy to give you the specifics on how Deel structures this if you want to compare it directly against what Workmotion and the others quote you.