EU Social Security Coordination

Skill Metadata

Skill Metadata

Field	Value
Jurisdiction	EU-27, EEA (Iceland, Liechtenstein, Norway), Switzerland, UK (via TCA)
Primary Legislation	Regulation (EC) No 883/2004 on the coordination of social security systems
Implementing Legislation	Regulation (EC) No 987/2009 laying down the procedure for implementing Reg 883/2004
Key CJEU Rulings	C-743/23 (Sep 2025, "substantial part" calculation); C-694/20 (Dec 2022); C-610/18 (2020, AFMB)
Scope	Determination of applicable social security legislation for persons active in multiple member states
Contributor	OpenAccountants
Validation Date	May 2026
Skill Version	1.0

Section 1 — Core principle: you pay social security in ONE country only

• Single applicable legislation — "Persons to whom this Regulation applies shall be subject to the legislation of a single Member State only." A person working across EU/EEA borders pays social security contributions in exactly one country. They cannot be required to pay in two countries simultaneously. The entire purpose of Regulation 883/2004 is to determine which single country's legislation applies. (Article 11(1) of Regulation 883/2004)

What "social security" covers under the Regulation

Branches of social security coordinated (Article 3)

Branch	Examples
Sickness benefits	Health insurance, sick pay
Maternity and equivalent paternity benefits	Parental leave payments
Invalidity benefits	Disability payments
Old-age benefits	State pension
Survivors' benefits	Widow/widower pension
Benefits in respect of accidents at work and occupational diseases	Work injury insurance
Death grants	Funeral payments
Unemployment benefits	Jobseeker's allowance
Pre-retirement benefits	Early retirement schemes
Family benefits	Child benefit

• Excluded from Regulation — It does NOT cover social assistance, supplementary pension schemes governed by contract, or special non-contributory cash benefits (which are listed in Annex X and non-exportable). (Annex X)

Four principles of coordination

1. Single applicable legislation — you pay in one country only
2. Equal treatment — same rights and obligations as nationals of the country where you're covered
3. Aggregation — periods of insurance in other countries count toward benefit entitlements
4. Exportability — cash benefits can generally be paid regardless of which country you live in

Section 2 — Determination rules: lex loci laboris

• General rule lex loci laboris — The legislation of the member state where the person is employed or self-employed applies. This is the "lex loci laboris" (law of the place of work) principle. (Article 11(3)(a))

Determination rules table (Art 11(3))

Situation	Applicable Legislation	Article
Employed in one member state	State where employed	Art 11(3)(a)
Self-employed in one member state	State where self-employed	Art 11(3)(a)
Civil servant	State of the employing administration	Art 11(3)(b)
Receiving unemployment benefits	State providing the benefit	Art 11(3)(c)
Called up for military/civil service	State requiring the service	Art 11(3)(d)
No activity (economically inactive)	State of residence	Art 11(3)(e)

The general rule is simple: you work in country X, you pay social security in country X. Complications arise only when a person works in multiple countries, is posted abroad, or combines employment and self-employment across borders.

What "employed" means

• Employed vs self-employed — The Regulation uses the definition of the member state whose legislation is being determined. A person is considered employed or self-employed based on the national law of the relevant member state. There is no EU-wide definition of employment vs self-employment for SS purposes.

Section 3 — Posted worker exception (A1 certificate)

• Posted worker exception — An employer may send (post) a worker to another member state while keeping that worker subject to the home country's social security legislation, provided conditions are met. (Article 12 of Regulation 883/2004)

Posted worker conditions (Article 12 of Regulation 883/2004)

Condition	Requirement
Duration	Maximum 24 months (anticipated duration at outset)
Replacement prohibition	The posted worker must not be sent to replace another posted worker whose posting period expired
Prior insurance	The worker must have been subject to the legislation of the sending state immediately before the posting began
Direct relationship	The worker must remain under the authority of the sending employer during the posting
Employer's substantial activity	The employer must normally carry out substantial activities in the sending state (not merely internal management)

Key limitations

• 24-month strict limit — The 24-month limit is strict. If the posting is expected to exceed 24 months from the outset, Article 12 does NOT apply. (Article 12)
• Article 16 agreement — If circumstances change and the posting extends beyond 24 months, an Article 16 agreement (exceptional agreement between competent institutions) can be requested. (Article 16)
• Prior insurance requirement — The worker must have been insured in the sending state BEFORE the posting. You cannot hire someone specifically to post them on day one (though a minimum prior period is not specified in the Regulation, national authorities typically require at least 1 month).
• Substantial business activity required — The employer must have genuine, substantial business activity in the sending state. A letterbox company with no real activity cannot post workers.

A1 certificate for posted workers

• A1 certificate (Portable Document A1) — The A1 certificate (Portable Document A1) is the proof that a posted worker remains subject to the sending state's legislation. It is issued by the sending state's competent institution.
• A1 certificate binding effect — Until an A1 certificate is obtained, the host country can demand contributions. The A1 certificate is binding on the host country's institutions and courts — the host country cannot refuse to accept a valid A1 unless it has been withdrawn or invalidated through the official dispute procedure. (CJEU: A-Rosa Flussschiff, C-620/15)

Section 4 — Multi-state workers (Article 13)

A person who normally pursues activity in two or more member states simultaneously follows different determination rules.

Employed persons in two or more states (Article 13(1))

Employed persons multi-state determination table (Article 13(1))

Test	Result
Pursues substantial part (≥ 25%) of activity in residence state	Residence state's legislation applies
Does NOT pursue substantial part in residence state, employed by ONE employer	Employer's registered office state applies
Does NOT pursue substantial part in residence state, employed by TWO+ employers in same state	That state's legislation applies
Does NOT pursue substantial part in residence state, employed by TWO+ employers in different states (one of which is residence)	Employer state (other than residence) applies
Does NOT pursue substantial part in residence state, employed by TWO+ employers all in states other than residence	Residence state's legislation applies

The 25% substantial activity test

• Substantial part definition — "Substantial part" means a quantitatively substantial part of all activities — measured by: 1. Working time (hours/days worked in the state as a share of total working time), AND/OR 2. Remuneration (pay attributable to work in the state as a share of total pay) (Article 14(8) of Implementing Regulation 987/2009)
• 25% threshold — 25 % (If LESS than 25% of either working time or remuneration is in the residence state, a substantial part is NOT being pursued there.) (Article 14(8) of Implementing Regulation 987/2009)
• CJEU C-743/23 clarifications — Confirmed that: the 25% threshold is assessed based on the projected situation over the next 12 months from the start of multi-state activity; only working time and remuneration are relevant criteria — nature of work, location of clients, or other factors are irrelevant; the assessment includes work in third countries (non-EU) in the denominator when calculating the percentage. (CJEU ruling C-743/23 (September 2025))

Determination procedure (Article 16 of Reg 987/2009)

• Determination procedure steps — 1. The worker (or employer) notifies the competent institution of the residence state 2. The residence state provisionally determines applicable legislation 3. The residence state informs all other states' institutions within 2 months 4. If no objection within 2 months → determination becomes definitive 5. If objection → dialogue between institutions; if no agreement within 6 months → refer to Administrative Commission (Article 16 of Reg 987/2009)
• Provisional period coverage — During the provisional period, the worker is subject to the provisionally determined legislation. This avoids gaps in coverage. (Article 16 of Reg 987/2009)

Section 5 — Self-employed across borders (Article 13(2))

Self-employed across borders determination table (Article 13(2))

Test	Result
Pursues substantial part (≥ 25%) of self-employed activity in residence state	Residence state's legislation applies
Does NOT pursue substantial part in residence state	State where the centre of interest of activities is situated

Centre of interest determination

• Centre of interest factors — For self-employed persons not meeting the 25% threshold in their residence state, the "centre of interest" is determined by considering: Where the fixed and permanent premises for the activity are located; The habitual nature or duration of activities pursued; The number of services rendered; The intention of the person as revealed by all circumstances.

Practical example: A freelance consultant resident in Belgium who works 60% of the time at clients in the Netherlands and 40% in Belgium → 40% ≥ 25% in residence state → Belgium's legislation applies.

Practical example: A freelance developer resident in Portugal who works 90% for clients accessed remotely from Portugal but the registered business is in Estonia → work is performed in Portugal (≥ 25%) → Portugal's legislation applies.

Section 6 — Simultaneous employment and self-employment (Article 13(3))

• Simultaneous employment/self-employment rule — A person who normally pursues employment in one state AND self-employment in another state is subject to the legislation of the state where the employed activity is pursued. (Article 13(3))

Simultaneous employment/self-employment table (Article 13(3))

Combination	Applicable Legislation
Employed in state A + self-employed in state B	State A (employment state)
Employed in states A and B + self-employed in state C	Determined per Article 13(1) rules for multi-state employees

• Key consequence and exception — Key consequence: A person employed in Germany who also freelances for clients in France pays ALL social security (including on the freelance income) in Germany. France cannot claim contributions on the self-employed activity. Exception: If the person pursues employed activity in two or more states AND self-employment in one or more states, the multi-state employee rules of Article 13(1) determine the applicable legislation first, and then that legislation covers ALL activities. (Article 13(1))

What the A1 certificate is

• Portable Document A1 — The Portable Document A1 (PD A1) is an official certificate confirming which member state's social security legislation applies to a person. It is proof that the holder does not need to pay contributions in any other member state.

When you need an A1 certificate

When A1 is needed table

Situation	A1 needed?
Posted to another member state for up to 24 months	YES — mandatory before posting begins
Normally working in two or more member states	YES — to confirm which legislation applies
Self-employed temporarily performing activity in another state	YES — mandatory
Business trip (< 2 days, no work performed)	NO — but advisable for evidence
Attending a conference or training	Generally NO — but complex if any "work" is performed

How to obtain an A1 certificate

• Steps to obtain A1 — 1. Application: Submit to the competent institution of the state whose legislation you claim applies 2. Information required: Identity details, employer details, nature of activity, countries of activity, anticipated duration, percentage of activity per country 3. Processing time: Varies by country (1–8 weeks typically) 4. Validity: Covers the period specified; for multi-state workers, typically issued for up to 24 months and renewable 5. Retroactive issue: Can be issued retrospectively (but some countries resist this; apply BEFORE activity begins)

Issuing authority by country

Issuing authority by country table

Country	Competent Institution for A1
Germany	GKV-Spitzenverband (DVKA) / competent Krankenkasse
France	URSSAF / CPAM (depends on scheme)
Netherlands	SVB (Sociale Verzekeringsbank)
Belgium	RSZ/ONSS (employed) / RSVZ/INASTI (self-employed)
Italy	INPS (Istituto Nazionale della Previdenza Sociale)
Spain	TGSS (Tesorería General de la Seguridad Social)
Portugal	ISS (Instituto da Segurança Social)
Austria	ÖGK (Österreichische Gesundheitskasse)
Ireland	Dept of Social Protection, Scope Section
Poland	ZUS (Zakład Ubezpieczeń Społecznych)
Sweden	Försäkringskassan
Denmark	Udbetaling Danmark
Malta	Department of Social Security
Greece	EFKA (e-EFKA electronic system)
Finland	ETK (Finnish Centre for Pensions)

Consequences of not having an A1

• Consequences of missing A1 — Host country may demand contributions (and the worker/employer cannot refuse); If contributions are paid in the wrong country, refund procedures apply but take 12–24 months; Penalties possible in some countries for working without a valid A1 (especially France: fines for employer); The worker remains covered by the correct legislation regardless of whether the A1 exists — the certificate is declaratory, not constitutive.

Section 8 — EEA/Switzerland extension

EEA/Switzerland extension table

Territory	Basis
EU-27 member states	Directly applicable EU regulation
Iceland, Liechtenstein, Norway	EEA Agreement (Decision of the EEA Joint Committee No 76/2011)
Switzerland	EU-Switzerland Agreement on the Free Movement of Persons (in force 1 June 2002)

• Identical application and limitation — The rules apply identically. A person working in Germany and Switzerland follows the same Article 13 determination as a person working in Germany and France. Limitation: The coordination only works within the EU/EEA/CH block. A person working in Germany and the United States is NOT covered by Regulation 883/2004 for the US portion — a bilateral totalization agreement between Germany and the US (if one exists) governs that relationship.

Legal basis

• TCA Protocol on Social Security Coordination — The EU-UK Trade and Cooperation Agreement (TCA), signed 30 December 2020, contains a Protocol on Social Security Coordination that provides continued coordination for persons moving between the EU and the UK after 1 January 2021. (EU-UK Trade and Cooperation Agreement (TCA))

Who is covered

Who is covered table

Persons	Coverage
Persons covered by the Withdrawal Agreement	Continue under the WA (more comprehensive rights)
Persons NOT covered by the WA who move between EU and UK after 1 Jan 2021	Covered by TCA Protocol
Third-country nationals moving between EU and UK	Generally NOT covered by TCA Protocol (unlike Reg 883/2004 which covers all nationalities)

Key TCA rules (similar to but narrower than Reg 883/2004)

Key TCA rules table

Rule	TCA Provision
Single applicable legislation	Article SSC.10 — same principle as Art 11 of 883/2004
Lex loci laboris	Article SSC.10(3) — same general rule
Posted workers	Article SSC.11 — maximum 24 months (same as Art 12)
Multi-state workers	Article SSC.12 — similar to Art 13 (25% test applies)
A1-equivalent certificate	PDA1 certificate issued under TCA provisions

Key differences from Reg 883/2004

Key differences table

Difference	Impact
No aggregation for unemployment in some cases	UK workers moving to EU may not aggregate UK periods for unemployment benefit
Healthcare limited	No EHIC for new cases; S1 for pensioners continues
Family benefits limited	No export of family benefits in all cases
Nationality restriction	TCA covers EU and UK nationals (not all nationalities like 883/2004)
No planned revision process	Unlike 883/2004 which has an ongoing revision proposal

Practical guidance for UK-EU cross-border workers

• A UK national posted from the UK to France: TCA Art SSC.11 applies → A1-equivalent from HMRC → continue UK NIC for up to 24 months
• A UK company hiring a remote worker in Spain: Worker is subject to Spanish SS → employer registers with Spanish TGSS
• A freelancer resident in UK working 50% UK / 50% Germany: TCA Art SSC.12 → substantial part in UK (50% ≥ 25%) → UK NIC applies to all activity

Scenario A — Remote worker for foreign employer

Facts: Maria lives in Portugal. She is employed full-time by a German company (GmbH). She works 100% remotely from her home in Lisbon. She never travels to Germany.

Analysis:

• Maria pursues activity in ONE state only (Portugal — where work is physically performed)
• Article 11(3)(a) applies: legislation of the state where employed = Portugal
• Maria is subject to Portuguese social security
• German employer must register as employer with Portuguese ISS and pay Portuguese contributions

Result: Portugal. The German employer registers with ISS, pays employer/employee contributions per Portuguese rates.

Scenario B — Posted worker

Facts: Johann works for a Munich-based engineering firm. He is sent to oversee a construction project in Austria for 18 months. He will return to Munich afterwards.

Analysis:

• Article 12 posting rules apply
• Duration: 18 months < 24 months maximum ✓
• Johann was previously insured in Germany ✓
• Employer has substantial activity in Germany ✓
• Not replacing another posted worker ✓

Result: Germany continues to apply. Employer obtains A1 from GKV-Spitzenverband (DVKA). Johann does NOT pay Austrian social security.

Scenario C — Multi-country freelancer

Facts: Sophie is a freelance UX designer resident in Belgium. She works 30% of her time for clients in Belgium, 40% in the Netherlands, and 30% in France.

Analysis:

• Article 13(2) for self-employed in multiple states
• Does Sophie pursue a substantial part in her residence state (Belgium)? 30% ≥ 25% → YES
• Belgium's legislation applies to ALL of Sophie's self-employed activity

Result: Belgium. Sophie pays Belgian self-employed social security (RSVZ/INASTI) on her entire worldwide self-employed income. No contributions owed in NL or FR.

Scenario D — Employee plus freelancer in different countries

Facts: Marco is employed in Italy (full-time software engineer at an Italian company). He also freelances as a consultant for German clients, performing this work from his home in Italy.

Analysis:

• Article 13(3): employed + self-employed in different states
• Employed activity in Italy → Italy's legislation applies to ALL activity
• BUT: the freelance work is ALSO performed in Italy (from home) → this is actually a single-state case
• Italy's legislation applies regardless

Result: Italy. INPS contributions on both employed and self-employed income. No German obligation.

Scenario E — UK employee working partly in EU post-Brexit

Facts: James is a UK resident employed by a UK company. He works 3 days/week from London (60%) and 2 days/week from the company's Paris office (40%).

Analysis:

• TCA Protocol Art SSC.12 (multi-state worker)
• James is resident in UK. Does he pursue ≥ 25% in UK? 60% ≥ 25% → YES
• UK legislation applies to all activity

Result: UK. James pays UK NIC on all earnings. French contributions not owed. Employer obtains PDA1 from HMRC confirming UK coverage.

PROHIBITIONS

• Prohibition list — 1. NEVER tell a user they must pay social security in two EU/EEA countries simultaneously. The fundamental principle is single applicable legislation. 2. NEVER assume that the country where a person is resident is automatically the competent SS state. Lex loci laboris means the country of WORK generally applies. 3. NEVER advise that an A1 certificate is "optional" or "nice to have." For posted workers and multi-state workers, it is the essential proof document. 4. NEVER assume Regulation 883/2004 applies to non-EU/EEA/CH countries. For US, Canada, Australia, etc., bilateral totalization agreements (if they exist) govern. 5. NEVER compute contribution amounts. This skill determines WHICH country — the country skill provides the rates and computation. 6. NEVER advise creating artificial posting arrangements to avoid higher contributions in the host state. This is a known abuse pattern and authorities actively investigate it.

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. Social security coordination determinations are fact-specific and have significant financial consequences. All outputs must be reviewed and signed off by a qualified social security coordination specialist before acting upon.

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