Social security at a brief
Social security coverage and contributions are a significant element to consider when working with global mobility.
Basically, social security determines what types of coverage the individual will have in various situations of life, e.g. illness, retirement, death, ma- or paternity, work related accidents etc. Often countries will have grand systems in place to ensure a certain level of social security, which can benefit individuals.
These benefits are typically financed through direct contributions from employers to authorities/funds or via taxes paid. The important element to grasp is that social security is an integral part of the compensation package – in the absense of mandatory coverage, insurances are typically assigned to ensure the well-being of the employee and to manage risks.
Coverage under a specific country’s social security (and thereby the requirement to contribute) is initially determined within the country’s own legislation. But, in the arena of global mobility there is often a need for determination of which country will and should be the one in fact covering the employee. Within EU/EEU the rules are governed via EU ACT 883/2004, which is directly applicable in all EU-member states. In regards to Denmark a number of treaties have been signed with states outside EU to encounter the potential double coverage/contribution.
The determination of coverage is paramount in any global mobility scenario as the expense and coverage can shift significantly whereby the project can become a failure financially. Furthermore, in the event of accidents or considering the total contecxt of the compensation package, the social security is an integral part to consider.
Lastly, authorities as well as companies around the world are focusing on this area raising penalties for non-compliance. The area of social security should be considered in a global perspective where it is the intention to elivate the general conditions for our population and work force. Therefore, it would a mistake not to consider this part with the similar dilligence as e.g. tax planning and compliance.
Your partner when moving people in the world
We are able to assist in all steps of the global mobility process with special focus on the tax, social security and compliance implications. Every step during the expatriation requires its own unique feature and skill. The process can categorize in three major steps:
- Social security analysis
- Social security scenarios
- Social security calculations
- Planning (e.g. compensations structure)
- Social security compliance
- Social security applications
- Communication with authorities
- Personal advice (entry/exit briefings)