During the last couple of days, many employers in Denmark have sent their employees home, and many employees continue to perform their work for from their homes, which sometimes are located abroad e.g. in Sweden and in Germany.
Within social security, there are significant differences in the contributions between Denmark and the other EU/EES Member States. An employer in Denmark pays DKK 10-15,000 per year per employee, whereas in many other Member States they pay 20-40% of the salary in employer contributions. It is therefore very important to watch closely if the employee can remain on Danish social security or not.
Applicable social security and the payment of social security contributions by the employee and the employer are determined by several factors, including where the employee performs her/his duties. In many cases, employees will be subject to social security in the country of residence if work performed in the country of residence exceeds 25% over a period of 12 months. Thus a German employee who usually performs less than 25% of his duties in Germany might, due to the COVID-19 situation, perform more than 25% of his duties from his home country. As a consequence, his Danish employer might need to register and pay German social security instead of Danish social security.
Another situation is if you have entered into an "Øresund" agreement on social security. You may then work up to 50% of the working time at home in Sweden. This limit is applicable within every current 3 months period. Also in this case, the COVID-19 situation could lead to more than 50% of the duties being performed in Sweden. In this case, the Danish employer would as a consequence have to register and pay Swedish social security instead of Danish social security.
However, the Danish, Swedish and German social security authorities have all informed that no action has to be taken in relation to the employees who due to the COVID-19 have been sent home to perform their work from their respective home country. The Danish authorities have also informed that the authorities stand united in this approach to the rules.
Regardless if you normally work 100% in Denmark, you have an "Øresund" agreement on social security, or if you have an Article 13 approval regarding work in two or more EU/EES countries, work time performed at home during the COVID-19 period will not be included in the limitations regarding approved work time in the various countries in order for you to maintain Danish coverage. If you have an Article 13 approval that is about to expire, you can apply for a new one as usual. Working time in your home country during the COVID-19 period is not to be included.
© 2020 KPMG Acor Tax, a Danish limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.