Employee Secondment From Germany

What is an employee secondment abroad?

A secondment is the time-limited work of an employee abroad whose employment relationship with the German employer continues during the assignment. The employee works on the instructions and account of the seconding company abroad and returns to their domestic workplace once the assignment ends. It is precisely this continuing tie to the German business and the return that is foreseeable from the outset that distinguish the secondment from other arrangements.

The secondment must first be set apart from the short business trip, in which the employee's own work assignment in the destination country is not the main focus. It also has to be distinguished from local hiring: if the employee is engaged by a foreign subsidiary and their German employment relationship is ended or suspended, this is no longer a secondment but a relocation of the employment relationship with different consequences for social security and tax.

In practice there are hybrid forms, for instance the secondment agreement combined with a local supplementary employment contract, or the suspended German employment relationship running in parallel with local employment abroad. Which variant is chosen determines the entire downstream structure and should therefore be settled at the start of the planning, not at the end.

For the German Mittelstand serving customers, construction sites, assembly projects or sales structures abroad, the secondment is the usual instrument for deploying its own staff on site for a limited time without giving up the tie to the home company.

What belongs in the secondment agreement?

The secondment agreement governs the work abroad as a supplement to the existing employment contract. It should be drafted as a separate agreement that overlays the base contract for the duration of the assignment and ends on return. The legal starting point is the choice of law. Under Article 8 of the Rome I Regulation, the parties may choose the applicable law, as a rule German law.

That choice has a limit, however: it must not deprive the employee of the protection of mandatory rules that would apply in the absence of a choice of law. Where the work abroad is only temporary, the habitual place of work does not change, so German employment law remains the basis, overlaid by the mandatory protective standards of the destination country.

In terms of content, at least the following points belong in the agreement:

The agreement should first address the applicable law and place of jurisdiction. An express choice of German law is common, while the mandatory rules of the host state remain unaffected. Duration, start and return are equally central: the assignment period, any extension and the employee's position after returning must be clearly described. The return clause in particular distinguishes a temporary secondment from a permanent relocation of the employment relationship.

Remuneration and allowances involve more than base salary. Expatriation and function allowances, cost-of-living adjustments, housing, home flights, relocation, payment currency and the paying entity should all be addressed. Any additional tax or contribution burden must also be allocated economically. The agreement should reflect the intended social-security and tax structure, including the A1 certificate, tax equalisation and any supplementary health, accident and pension cover. Finally, working time, leave and public holidays must be adapted to local conditions without falling below the mandatory standards of the host country.

A properly drafted secondment agreement anticipates the typical points of dispute, in particular the return and the allocation of additional costs. The frequently searched expat contract is nothing other than such a secondment agreement, usually for longer assignments abroad in management or specialist roles.

When do you need an A1 certificate, and how do you apply for it?

The A1 certificate (A1-Bescheinigung) proves which social security law an employee is subject to during their assignment abroad. For assignments in the EU, the EEA and Switzerland, it shows that the employee remains insured in the German system and that no contributions are due in the destination country. The basis is Regulation (EC) No 883/2004: under its main rule, the law of the state of employment applies, but the secondment rule in Article 12 allows German law to continue where the anticipated duration of the work does not exceed 24 months and the employee does not replace a person already posted.

The A1 certificate is required even for short assignments, including single-day business trips, trade fair visits or assembly jobs. It must be in place before the trip starts. In Germany it is applied for through the electronic procedure under Section 106 SGB IV. For those with statutory insurance the health insurance fund is responsible, for those with private insurance the Deutsche Rentenversicherung, and for members of professional pension schemes the working group of professional pension institutions.

Since 1 January 2026, the electronic procedure has also been extended to the states with which Germany has concluded a social security agreement, so that the certificate can be requested digitally for many agreement states as well.

In practice this means that anyone regularly sending employees across the border needs a fixed process that places the A1 application ahead of every trip. The certificate should be carried in the original or as a printout and documented within the business, because inspections in the destination country ask for exactly that.

What happens without an A1 certificate?

If the A1 certificate is missing during an inspection, several consequences follow at once. First, many destination countries impose fines that, depending on the state, run into four figures per employee, and into five figures in countries that inspect particularly strictly, and that can be directed at both the company and the employee. Second, the social security authority of the assignment country can demand contributions where proof of German insurance is missing, which leads to a double contribution burden. Third, the employee may in an individual case be prevented from starting work, for example by being refused access to a construction site, until the proof is produced.

Countries such as France, Austria, Belgium and Switzerland inspect particularly strictly, in some cases even for short assignments. Inspections have increased noticeably in recent years. Because the certificate is free of charge and applied for electronically, it causes no notable costs beyond the organisational step. The only risk lies in forgetting that step. A reliable internal process that allows no trip without an A1 is therefore the most effective safeguard.

How long can a secondment abroad last?

There is no single figure that answers the question of the maximum duration, because two deadlines from different areas of law sit alongside each other and have to be considered separately.

In social security terms, Article 12 of Regulation 883/2004 permits German law to continue as long as the anticipated assignment duration does not exceed 24 months. For longer assignments within the EU, an exception agreement (Ausnahmevereinbarung) under Article 16 of the Regulation can keep the employee in the German system. This agreement requires the consent of the competent authorities of both states and must be applied for before the original 24 months expire. In practice, secondments of up to five years are secured in this way.

In employment law terms, a shorter threshold applies. Under the amended EU Posted Workers Directive, the hard core of the destination country's working conditions applies from the first day. Once the secondment exceeds twelve months, however, the entire mandatory employment law of the host state applies, no longer only the hard core. This deadline can be extended to eighteen months if the employer submits a reasoned notification. From that point the assignment is shaped more strongly by the law of the destination country in employment terms, which should be factored in early for long-term secondments.

The two deadlines are independent of each other. A secondment can still be running in the German system under social security law while the full law of the destination country already applies under employment law. Anyone planning the maximum duration therefore has to keep both timelines in view at the same time.

Which working conditions and reporting obligations apply in the destination country?

Even where the German employment contract continues, the destination country enforces mandatory minimum standards. Within the EU this rests on the Posted Workers Directive as amended by Directive 2018/957. From the first day, the posted worker is entitled to the hard core of the local working conditions.

These include in particular remuneration under the rules in force at the place of work, including allowances, the maximum working times and minimum rest periods, the minimum paid leave, and the rules on occupational health and safety. The principle is: equal pay for equal work in the same place. A German employer therefore cannot permanently pay its employee below the level customary in the destination country.

Reporting obligations are added to this. Almost all EU and EEA states require the secondment to be reported to a national authority before work begins, in many countries by the day before work starts at the latest. The requirements differ considerably from country to country, for instance regarding the reporting portal, the documents to be kept available, the obligation to appoint a contact person on site, and the documentation duties.

For every destination state it must therefore be checked separately which report, which translations and which documents are required. This country-specific check belongs at the start of every assignment, because a missed report triggers fines of its own, independent of the A1 certificate.

Does the employee stay in the German social security system?

Within the EU, the EEA and Switzerland, the posted employee remains in the German social security system through the A1 certificate as long as the conditions of Article 12 of Regulation 883/2004 are met. For states with which Germany has concluded a social security agreement, the continuation follows the respective agreement, which often covers only individual branches of social security and provides its own maximum durations.

For assignments in states without such an agreement, the so-called non-agreement territory, Section 4 SGB IV applies. This rule, known as Ausstrahlung (radiating effect), means that the German rules on compulsory insurance continue where the secondment takes place within an employment relationship existing in Germany and is limited in time from the outset. The employee then remains insured in Germany.

That does not, however, protect against the destination state likewise demanding contributions under its own law. In these cases a double contribution burden can arise that can only be cushioned by the national law of the destination country or by private cover. Before assignments in non-agreement territory it is therefore worth a targeted check of which contributions actually arise there and how gap-free insurance cover for illness and accident is arranged.

How is the salary taxed during the secondment?

The tax treatment follows its own rules that do not run parallel with social security and that have to be clarified in each individual case with the tax adviser. The main rule: under most double taxation agreements, the right to tax the salary belongs to the state where the work is performed. The 183-day rule makes an exception to this rule. The right to tax remains with the state of residence where the employee stays no longer than 183 days within the relevant period in the state of work, the salary is not borne by an employer resident there, and it is not borne by a permanent establishment there either. All three conditions must be met together.

In practice, much depends on who counts as the economic employer. If a foreign group company bears the wage expense, the right to tax can move to the destination country even before the 183 days expire. How the relevant period is calculated also differs from agreement to agreement between the calendar year, the tax year and a rolling twelve-month period. These questions are of a tax nature and belong in the hands of the tax adviser and the adviser in the destination state. We make sure that the secondment agreement maps the tax commitments, for example on a tax equalisation, cleanly and that these fit the chosen structure.

What should you keep in mind for third countries and typical mistakes?

For assignments outside the EU, the residence and work permit level is added. The employee regularly needs a visa and a work permit from the destination state, the requirements and lead times of which vary widely. A tourist visa is not sufficient for work activity. These permits have to be applied for early because they effectively determine the start of the assignment. In parallel, the questions described above on social security in non-agreement territory and on taxation under the respective agreement apply, to the extent one exists.

The following mistakes recur in practice:

In practice, preparation rarely fails because of a single difficult legal issue; it fails because individual workstreams are omitted. The A1 certificate is often forgotten for short trips even though it is required from the first day. It is also overlooked that the certificate does not replace the employment-law posting notification in the host country. Without a robust return clause, disputes may arise over the employee's role and workplace after the assignment. Different legal timelines are frequently confused: the 24-month social-security limit runs independently from the twelve-to-eighteen-month employment-law threshold. Further exposure arises where remuneration, working time and leave are structured solely under German law without taking account of the mandatory host-country standards. For third countries, the timely application for the residence and work permit ultimately determines whether the employee can start as planned.

Orderly preparation prevents these mistakes. A fixed sequence makes sense: first settle the structure, that is, secondment, local hiring or a hybrid, then draw up the secondment agreement with the choice of law and return clause, next handle the A1 certificate and secondment report for the specific destination state, obtain the visa and work permit for third countries, and coordinate the tax and social security questions with the competent advisers throughout the entire process.