Social Security for Remote Work Across EU Member States

By Dr. Theresa Rath, Attorney at Law

Which social-security system applies when work and residence are in different countries?

A person living in Italy, Spain or Portugal while retaining a professional structure, clients or regular working days in Germany does not automatically remain subject to the German social-security system. For cross-border activities within the EU, the coordination rules are designed to make the legislation of one Member State applicable at any given time. The competent state depends on those rules and on how the work is actually organised.

Remote work is not a separate legal status. A home-office day is generally performed in the country where the person is physically present. Regular working days in the country of residence can therefore turn an apparently German activity into a multi-state arrangement.

My legal advice is limited to German law, including the EU-law rules applicable in Germany. I do not provide tax advice.

Temporary activity or habitual work in several Member States?

The assessment starts with the working pattern. Where activity is moved to another Member State only temporarily, the rules on posted workers or temporarily pursued self-employed activity may apply. A person who works in at least two countries on a planned and recurring basis will generally fall within the rules for habitual activity in two or more Member States.

The label used in a contract is not decisive for a continuing remote-work arrangement. The actual facts matter: days spent and worked in each country, the state of residence, the nature of the activity, clients or employers, professional infrastructure and the anticipated pattern over the following twelve months.

Residence, a substantial part of the activity and the 25% indicator

The state of residence plays a central role where a person habitually works in several Member States. For employed persons, the question is whether a substantial part of the activity is pursued there. Working time and remuneration are important criteria. A share of at least 25% will generally indicate a substantial part, but the result remains a prospective overall assessment rather than a threshold that can simply be selected.

For self-employed persons, it is likewise necessary to determine whether a substantial part of the activity is pursued in the state of residence. If not, the legislation of the state in which the centre of interest of the self-employed activity is situated may apply. Relevant factors can include fixed professional premises, the nature and duration of the activity, the number of services and discernible business intentions.

Mixed activities require a separate analysis

Arrangements combining employment in one state with self-employed activity in another are particularly prone to misclassification. Different systems do not automatically apply to each activity. Under the EU coordination rules, the legislation of the state of employment may generally govern the arrangement as a whole.

The distinction between employment and self-employment is not necessarily identical in every Member State. Contractual labels, invoicing practices or a German professional qualification do not replace an assessment of the work actually performed.

The A1 certificate: evidence of applicable legislation, not a mere formality

The A1 certificate records which country’s social-security legislation applies. For habitual activity in several Member States, the institution in the state of residence is generally responsible for determining the applicable legislation. A person residing in Germany contacts the competent German institution; where residence is in another Member State, the institution there will normally be the first point of contact.

Self-employed persons also generally require an A1 certificate when carrying out professional activities in other Member States. This is not limited to persons covered by statutory health or pension insurance. The application route differs depending on whether the arrangement involves employment, self-employment or both.

Professional pension schemes, private cover and related interfaces

For independent and regulated professions, a professional pension scheme may exist alongside the general social-security systems. The effect of membership, an exemption or private cover cannot be determined from the A1 certificate alone. Supplementary and private schemes may also fall outside parts of the coordination framework.

Residence law, social security, professional authorisation and tax law use different connecting factors. An A1 certificate therefore determines neither residence rights nor tax residence. Labour-law rules on posted workers likewise address different questions from the determination of applicable social-security legislation.

How I structure the assessment

I first map the country of residence, nationality, employed or self-employed status, physical working locations, time shares, clients or employers, professional infrastructure and planned changes. I then distinguish temporary activity from habitual multi-state work and identify the relevant German-law and EU-law interfaces.

The result is an organised basis for decision-making: Which conflict rule is likely to apply? Which institution must determine the competent system? Which A1 application route fits the facts? Where should a social-security institution, professional pension scheme or specialist adviser in the country of residence be involved? This divides a complex setup into understandable workstreams.