Paying social security contributions and employer registration in the EU - Your Europe (2024)

As an employer in the EU, you must make sure that your employees have proper social security coverage. Each EU country has its own social security laws, but EU rules coordinate national systems to make sure people moving to another country do not lose their social security cover (for example pension rights and healthcare) and always know which national laws apply to them.

General rule: Only one country's laws apply

Your employees can only be subject to the social security laws of one EU country at a time. The obligations and rights under these laws are the same for all workers in that country, whether local or from abroad. Typically, the country where your employee works (or you work as a self-employed person) is where they pay social security contributions. This applies regardless of where they live or where your company is based.

If your employees (or you as a self-employed person) live in a different EU country than where they work or are insured, they may need an S1 form. This form allows them to receive healthcare in their country of residence while being covered by the social security system of the country where they work.

Sample story

Ruta works for a multinational company based in Germany but is assigned to work in France. She lives in Germany and commutes daily to France. Since Ruta works in France, she must comply with French social security. Ruta’s employer registers with the French social security institution and ensures that Ruta is registered as well. Ruta pays social security contributions in France, ensuring she receives appropriate benefits there.

Sample story

Tiago is a graphic designer who lives in Portugal and is self-employed, working mostly in Spain. Since Tiago is working in Spain, he must comply with Spanish social security laws. Tiago registers himself with the Spanish social security institution. Because Tiago lives in Portugal but is insured in Spain, he applies for an S1 form. This form allows him to receive healthcare services in Portugal while being covered under the Spanish social security system.

Exceptions: Posted workers

If you send employees (or go yourself as a self-employed person) to work in another EU country for less than 2 years, they can remain insured in the country where they were originally employed under certain conditions. For short-term postings, apply for a certificate of coverage, the A1 form (also called PDA1) to show your employees remain insured in the country where they worked before.

Sample story

Paulo works for an Italian company and is sent to Belgium for a project lasting 18 months. Since Paolo is posted to Belgium for less than 2 years, he can remain under the Italian social security system. Paulo’s employer applies for a certificate of coverage, the A1 form (or PDA1), certifying that Paulo will continue to be insured in Italy. Paulo continues to pay social security contributions in Italy while working temporarily in Belgium.

Sample story

Kasia is self-employed in Sweden and takes a 6-month consulting project in France. Since Kasia’s work in France is temporary (less than 2 years), she can remain under the Swedish social security system. Kasia applies for an A1 form (PDA1) to maintain her Swedish social security coverage. Kasia continues to pay social security contributions in Sweden while temporarily working in France.

Special cases: Multi-country work

If your employees work in more than one EU country simultaneously, specific rules determine where they should pay contributions. The details depend on factors such as residence and the proportion of work done in each country.

You and your employees must inform the relevant social security institutions in the country where each employee lives about the employee’s multi-country work arrangements. You need to provide documents that verify the working situation, including contracts, work schedules, and any other relevant paperwork. The social security institutions will coordinate to determine which country’s laws apply.

Sample story

Sophie lives in Belgium and works 50% in Belgium, 30% in France, and 20% in Germany. Because she works in multiple countries, special rules apply to determine where she should pay social security contributions. Sophie and her employers inform the relevant social security institutions. They coordinate and determine that Belgium's social security laws apply because she performs the most substantial part of her activities there. Sophie pays social security contributions in Belgium, ensuring compliance and coverage.

Sample story

Cesar lives in Portugal but regularly takes assignments in both Spain and Italy, splitting his time almost equally between the three countries. Cesar is self-employed in multiple countries, so specific rules determine the applicable social security legislation. Cesar informs the social security institutions in Portugal, Spain, and Italy. After coordination, the institutions determine that he will pay contributions in the country where he performs the most substantial part of his activities. Cesar pays social security contributions in Portugal, where he spends the most time, ensuring he is covered appropriately.


Registration obligations

As an employer, you must register with and pay into the social security institution in the country where your employees work, even if your business is not based there. This establishes your presence in the local social security system.

You must also register your employees with the social security institution of the country where they work. This ensures they are covered under the local social security scheme.

Warning

Most EU countries require employers to inform social security authorities, tax authorities, or employment agencies when an employment contract is terminated. This helps to update the employee's social security records, stop social security contributions, and manage unemployment benefits.

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Paying social security contributions and employer registration in the EU - Your Europe (2024)
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