ubiqueThe words you will meet when you hire abroad, in plain English
Twenty-two terms, alphabetical, each with what it means, why it matters to you as an employer, and where Ubique fits. Written by our legal and payroll teams for people who are not lawyers.
Twenty-two terms
Numbers first, then letters. If a term you need is missing, email hello@ubiquehq.co.uk and we will add it.
13th salary
An extra month of pay that is mandatory in some countries and customary in others. Brazil, Mexico (aguinaldo), Argentina, Portugal, Spain and Greece require it by law; Italy and Austria often have a 14th as well. It is usually paid in December, sometimes split between June and December.
Why it matters: a €50,000 salary in Spain costs €50,000 in 14 instalments, not 12 of €4,167 plus two surprises. Ubique Calculator includes it where it applies.
A1 certificate
A form issued by an EU, EEA, Swiss or UK social security authority confirming that an employee stays covered by their home country's social security while temporarily working in another member state. Without it, the host country can demand contributions.
Why it matters: if your employee in Portugal spends three months at a client in Germany, they need an A1 before they go. Ubique requests it as part of the travel workflow.
At-will employment
The default rule in most US states: either party may end the employment at any time, for any lawful reason, without notice or severance. Exceptions exist for discrimination, retaliation and contractual promises, and some states and cities add their own.
Why it matters: at-will is almost unique to the US. In nearly every other country, ending employment requires a reason, notice and often severance. Do not assume US practice travels.
Benefits in kind
Non-cash benefits an employee receives from the job: a company car, private health insurance, a laptop used personally, gym membership, housing. Most countries tax them as income, often with a specific valuation rule for each type.
Why it matters: a £1,200 private health plan in the UK is taxable for the employee and attracts employer National Insurance. Ubique reports benefits in kind through local payroll so nobody gets a surprise tax bill.
Collective agreement
A contract between unions and employers, or employer associations, that sets minimum terms for a sector or company: pay scales, working hours, leave, notice and sometimes bonuses. In France, Spain, Italy, Sweden and the Netherlands, a sector agreement often applies to you whether you signed it or not.
Why it matters: the statutory minimum is not always the floor. Ubique assigns the applicable agreement at onboarding and applies its rates.
DPA (Data Processing Agreement)
A contract required under GDPR and the UK Data Protection Act 2018 whenever one organisation processes personal data on behalf of another. It sets out what is processed, for how long, the security measures, sub-processors and what happens on termination.
Why it matters: your employees' payroll data is personal data. Ubique's DPA is downloadable at /legal/dpa/ without a sales call.
Employer contributions
Social security, pension, health, unemployment and accident insurance payments an employer must make on top of gross salary. They range from near zero in some Gulf states to over 40 percent of salary in France or Belgium. They are the single biggest reason a hire costs more than the salary.
Why it matters: Ubique's fee excludes them. The Calculator and the country pages show the full figure so you can budget correctly.
Employer of Record (EOR)
A company that legally employs a person on your behalf in a country where you have no entity. The EOR signs the local contract, runs payroll, pays contributions and provides mandatory benefits. You direct the day-to-day work and pay the EOR a monthly fee plus the cost of employment.
Why it matters: it is the fastest way to employ someone compliantly abroad. Ubique's EOR covers 160 countries from £499 per employee per month. Learn more.
Equity: EMI, ISO and NSO
Three kinds of share option. EMI (UK) and ISO (US) are tax-advantaged schemes available only to employees of the granting company or its qualifying subsidiaries. NSOs, and UK unapproved options, can be granted to anyone, including contractors and EOR employees, with income tax at exercise.
Why it matters: an EOR hire is employed by Ubique, so EMI and ISO are not available to them. NSOs and unapproved options are. Our equity add-on handles exercise withholding.
Gross-to-net
The calculation from gross salary to the amount that lands in the employee's bank account: income tax, employee social contributions, pension deductions, benefits in kind and any court orders. The employer cost sits on top of gross; the net sits below it.
Why it matters: candidates abroad often negotiate in net. Ubique shows gross, net and total employer cost for every offer so you and the candidate are talking about the same number.
IR35
UK tax rules that apply when a person provides services through their own limited company but would be an employee if the company were not there. Since 2021, medium and large clients must decide the status and, if "inside IR35", deduct tax and National Insurance as for an employee.
Why it matters: a UK contractor working full-time for you through a limited company may be inside IR35. The Misclassification Risk Check covers the IR35 tests.
Misclassification
Treating someone as a contractor when, by the way the relationship actually works, they are an employee. Courts and inspectors look at control, hours, exclusivity, equipment and whether the person can send a substitute. The contract title does not decide it.
Why it matters: reclassification means back contributions, interest, penalties and leave entitlements. Ubique scores every contractor and Ubique Shield covers you if a claim lands.
Notice period
The time between telling someone the employment is ending and the last day. Statutory minimums vary widely: one week in the UK after a month's service, one to three months in Germany depending on seniority, up to six months for long-serving employees in some countries. Notice from the employee is often shorter.
Why it matters: budgeting an exit means budgeting the notice. Ubique Atlas compares statutory notice across countries.
Payroll cut-off
The last date in a payroll cycle when changes can be entered: new hires, salary changes, bonuses, expenses, leave. Anything after cut-off goes into the next cycle or an off-cycle run.
Why it matters: a bonus entered on the 22nd may not appear until next month. Ubique's cut-off is the 15th for most countries, with the exact date per country shown in the dashboard calendar.
PEO (Professional Employer Organization)
A co-employment arrangement, mainly in the US and UK, where you keep your entity and remain the employer but the PEO runs HR, payroll, benefits and compliance under its own registrations. Unlike an EOR, a PEO requires you to have an entity in the country.
Why it matters: if you already have a UK or US entity, a PEO is cheaper than EOR and gives access to pooled benefits. Ubique PEO covers both.
Permanent establishment
A tax concept: when a company's activity in a country is substantial enough that the country can tax its profits there. A fixed place of business, or a person habitually concluding contracts on the company's behalf, can create one. Having employees in a country does not automatically create it, but senior sales or decision-making roles can.
Why it matters: EOR and VEO reduce the risk but do not remove it. If a role looks like it could create a permanent establishment, we say so before you hire.
Posted worker
The legal term, used in the EU Posted Workers Directive, for an employee sent by their employer to work temporarily in another EU member state. The host country's minimum pay, working time and leave rules apply from day one, and a prior notification to the host authority is usually required.
A note on wording: we use "employee" everywhere else on this site. We keep the statutory term here because that is what the directive and the forms call it.
Probation
An initial period during which either side can end the employment with shorter notice and, in many countries, without the usual dismissal protection. Legal maximums vary: six months is common in Germany and France; Belgium abolished it; some countries allow up to a year for senior roles.
Why it matters: probation is your lowest-cost exit. Ubique sets the maximum legal probation in every contract unless you ask for less.
Severance
A payment due to an employee when employment ends, in addition to notice. Often formula-based: so many days or weeks of pay per year of service. Mandatory in many countries on dismissal without cause; in others only for redundancy; in the US generally not required at all.
Why it matters: in Spain, dismissing a five-year employee without cause costs roughly 33 days of pay per year of service. The country guides give the formula for each country.
SOC 2
An audit standard from the American Institute of CPAs that tests a service provider's controls on security, availability, confidentiality, processing integrity and privacy. Type I checks the controls exist at a point in time; Type II checks they operated over a period, usually a year.
Why it matters: your payroll provider holds salaries, bank details and identity documents. Ubique is SOC 2 Type II audited; the report is available under NDA. See Security.
VEO (Virtual Employer Organization)
Ubique's term for employing people directly in a country where you have no entity, through a non-resident employer registration. Your company is the legal employer; Ubique does the registration, the payroll and the filings. Available in regulated markets such as Germany and Spain.
Why it matters: VEO sits between EOR and an entity. The employment relationship and its IP sit with you, at lower cost than a GmbH or an SL. Learn more.
Works council
An elected body of employees with legal rights to information, consultation and, in some countries, co-determination on matters such as working time, dismissals and restructuring. Mandatory above a headcount threshold in Germany (five employees can request one), France, the Netherlands and Austria, among others.
Why it matters: once a works council exists, some decisions need its agreement. EOR employees are counted at the EOR entity, which is one reason larger German teams move to VEO or an entity.
See how each term plays out in a specific country
A definition tells you what a notice period is. The country guide tells you that in Germany it is four weeks during the first two years and grows to seven months after twenty. Ubique Atlas puts that next to Spain, Poland and the Netherlands on one screen.
Not legal advice
These definitions are general. Rules change and exceptions exist. For a specific case, your account manager can connect you with the local legal team.
Reviewed quarterly
Benedikt Maier's team reviews the glossary with the country guides. Last review: September 2026.
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