Financing and Costs of a Transfer Company
The cost to the employer per employee and month of employment in a transfer company will be about 50% of the last gross monthly salary.
These transfer company costs consist of:
- Salary payments to supplement short-time allowance: 35%
- Cost of social insurance: 45%
- Transfer company administration costs: 5%
- Costs for training, job placement and consulting: 15%
The employees generally receive 80-85% of their last net salary
This consists of 60-67% short-time allowance from the Federal Employment Agency combined with the supplement from the transfer company. The supplement compensates for the difference between full salary and the short-time allowance and covers lost earnings for annual leave and public holidays, which are not eligible for short-term allowance.
The employer’s share should generally be paid from separate redundancy scheme funds. In cases where the employer is in a critical financial situation with a limited budget in the restructuring process, the partners often agree that the employees can join the transfer company before the end of the normal notice period, in order to ensure the financing viability of the transfer company. This arrangement can mean, for example, that a 3 month notice period can be used to finance about 6 months in the transfer company.
Spint Bonus for Employees
The acceptance and success of a transfer company can be significantly increased if employees who leave the transfer company early are awarded the unused part of the residual funds in the form of a bonus.