Nowadays, many people work in different countries (two or more). Employers using the services of our PRWT accounting firm then wonder what the issue of paying social security contributions for these employees looks like.
To answer this question, each case should be analyzed in relation to Art. 13 of the Regulation of the European Parliament and of the Council (EC) No. 883/2004 of April 29, 2004 on the coordination of social security systems (Journal of Laws No. 166 of April 30, 2004, p. 1). According to the aforementioned provision, in general, when a person pursues an activity as an employed person in several Member States, he is subject to the legislation of the Member State in which he is domiciled if he performs a substantial part of his work. If, on the other hand, the employee does not carry out a substantial part of his work in the Member State of residence, it is necessary to establish, inter alia, in which country the employee performs the greater part of the work and where located the headquarters of the employer.
Below are some practical examples of the use of the above-mentioned Regulation:
I. The employee lives most of the year in Germany and works there for an employer based in Germany. Additionally, the employee performs work for the Polish employer (1-2 times a week). In which country will social security contributions be paid for this employee?
– Because of working in the country where the employee lives for most of the year, he is subject to the German social security legislation.
II. An employee who lives permanently in Poland is employed by two companies based in Poland. As part of his duties, the employee works for companies for 70% of his working time in France, and the rest of his working time is in Poland.
– In this case, the employee will be subject to the Polish legislation on social security due to the fact that both employers are located in Poland.