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How is the security deposit calculated?

What is a Security Deposit?

A Security Deposit (SD)  is a predetermined sum of money paid by the employer as a financial guarantee during an employee's employment period. This deposit safeguards against potential financial discrepancies or unexpected employment-related expenses.

How is the Security Deposit Calculated?

The amount of the Security Deposit varies depending on several factors, such as the nature of the employment, the contractual obligations, and the potential financial risks involved. Employers are informed of the exact SD amount in terms of months during the contract negotiation phase. The deposit amount is typically calculated based on a combination of the following factors:

  • Contractor's Rate (only for AOR contractors): 

The security deposit is aligned with the contractor’s compensation structure, considering hourly, daily, or monthly rates. Skuad uses the monthly rate to calculate the required security deposit.

  • Employee’s Rate: 

For an employee, the SD amount is a sum of the gross salary, employer contribution and Skuad fee multiplied by the period as finalized during contract signing. When clients add new team members, Skuad transparently displays the required deposit amount, ensuring clarity before proceeding.

Client Specifications

The specific requirements and risk assessments play a crucial role in determining the deposit amount period. 

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