Social security without borders: the 25% rule clarified

Organizing cross-border employment properly is far from straightforward. A multidimensional approach is essential. It involves a combination of aspects that must be managed coherently. A wide array of legal disciplines and practical considerations come into play, including taxation, employment law, migration rules, permits, succession and family law, social security, and many more.

In the field of social security, the European Court of Justice delivered an important judgment on 11 December 2025 concerning a situation that arises frequently in practice. The case concerned an employee employed by a Swiss company and resident in Germany. He worked in Switzerland, in Germany, and in countries outside the European Union (“EU”) and the European Economic Area (“EEA”). The question was where social security contributions were due and where the employee was entitled to social security coverage.

Where an employee carries out activities as an employee in two or more Member States (with Switzerland also being considered a Member State for these purposes), the social security legislation of the state of employment applies, unless the employee performs a substantial part of his or her activities in the state of residence. A substantial part is deemed to be performed where 25% or more of the working time and/or remuneration is linked to the state of residence.

The Court was asked whether, for the calculation of the 25% threshold, only activities performed in Member States should be considered, or whether activities performed in third countries outside the EU/EEA must also be considered.

The Court leaves no room for doubt: all activities, wherever in the world they are performed, must be taken into account.

If you employ staff outside the EU or the EEA, it is advisable to discuss this proactively to assess the potential consequences and any remedial measures. For further information or questions, you may always contact your regular contact person at Tiberghien.