Crossborder living and working: working from home

12 November 2021

How about the rules for social security and taxes when working from home

Crossborder living and working in the Region Euregion Meuse Rhine has become a normal phenomenon in the last years. Working from home is widespread as a result of the corona pandemic. However, there are a number of things to consider when working across borders. More and more employers and employees want to work more at home after the corona pandemic is over. As nice as it can be to work at home, the consequences for employees and employers can be considerable for social security and taxes.

Exception rules for social security and taxes during the corona pandemic

During the corona pandemic, exception rules were drawn up to prevent you or your employer from suddenly being confronted with different rules for social security and taxes. For social security and taxes, it is assumed that you fall under the system you would fall under if the pandemic did not occur. In other words: you work at home because of the coronas measures and you would normally have been at the office in, for example, Germany during that time. So you live in Germany and work in the Netherlands. Regarding the Social Security this means that you have been working at the office during that time, because of the Corona-measures. For most people, the exception rule in social security means that there is no change in the applicable legislation. As things stand, the regulation is valid until 31 December 2021. Regarding the Taxes nothing changed, but then you could apply for the normal standard rules.

What is the standard situation for social security and how is this regulated in the European Union?

If there is cross-border employment, the EU rules for the coordination of social security apply. For social security (health insurance long-term care insurance, unemployment insurance, pension insurance), the all-or-nothing principle then applies: you can only be socially insured in one country at a time. Another important rule is that you are socially insured where you work.

If you work at home in the Netherlands and also with your employer in Germany, you are working in two countries. The proposition country of employment = country of social security does not work like that anymore. That is why there are rules that determine which country is responsible for social security.

To determine whether you are socially insured in the country of the employer or in your country of residence, the number of hours you work in your country of residence is decisive. This is regulated in the EU Regulation 883/2004. If you work 25% or more of your total working hours as an employee in your country of residence, you fall under the social security schemes of your country of residence.

Standard situation regarding Taxes

The Standard situation regarding Taxes is according to the Tax Treaties the day or days you work at home are taxed in the country of residence and the days or day you work at your work country are taxed in the work country.

As we have said before, people want to work more from home than before the pandemic and while still living in one country in this region and working in another country, there can be switches in social security. This has considerable consequences for the employee but also for the employer.

More information and questions

We advise employers and employees to take this in mind seriously and ask advice at the Cross Border Information Point Maastricht to see which consequences this might have, when the temporary corona measures for social security and taxes are withdrawn.

More information