What Are End-of-Contract Indemnities?
End-of-contract indemnities refer to the financial compensations awarded to employees upon the termination of their employment contracts. In the context of Horizon Europe projects, understanding whether these payments can be included as personnel costs is crucial for accurate budgeting and financial reporting.
Are End-of-Contract Indemnities Eligible as Personnel Costs?
Yes, these indemnities can be considered as eligible personnel costs under specific conditions:
What Conditions Must Be Met?
- Employment Contract: The employee must be under a formal employment contract.
- Timing of Employment Termination: The termination should occur during the project’s duration.
- Consistency with Remuneration Practices: The indemnities should be part of your usual remuneration practices or be mandated by national labor laws.
How Can You Charge These Costs to Your Project?
To incorporate end-of-contract indemnities into your project costs effectively, follow these steps:
- Prorate the Indemnity: Determine the amount of the indemnity corresponding to the time the employee spent on the project.
- Calculate the Daily Rate: Divide the prorated indemnity by the maximum declarable day equivalents during the project.
- Apply to Personnel Costs: Multiply the daily rate by the actual number of days the employee worked on the project, then add this amount to the project’s personnel costs.
Why Is This Important?
Handling end-of-contract indemnities correctly ensures compliance with the financial guidelines of Horizon Europe and helps in maximizing the utilization of granted funds. It also prevents potential discrepancies during audits.
What Should You Remember?
- Documentation: Keep detailed records of the calculations and payments to ensure transparency and ease of verification during audits.
- Legal Compliance: Always check that your practices align with applicable labor laws to avoid legal complications.
How to Get Help?
If you find these calculations overwhelming or if you need further clarification on how to apply these practices to your Horizon Europe project, don’t hesitate to contact our support team at Kronis. We specialize in providing tailored guidance to help you manage your project’s financials effectively.
