Germany–Switzerland · Employees

Working from home in Germany for a Swiss employer: tax and social security

If you live in Germany, are employed by a Swiss company and regularly work from Germany, several separate issues need to be considered. For tax purposes, the first question is whether the frontier-worker rule in Article 15a of the Germany–Switzerland double taxation agreement (DTA) applies. Outside that rule, the place where the work is actually performed plays a central role. Wage tax, employer obligations and social security must also be assessed separately.

Actual work location

Working from home in Germany generally counts as working in Germany for tax purposes

In international employment taxation, the starting point is generally where the work is actually performed. A working day spent entirely working at the employee’s German home therefore generally counts as a day worked in Germany.

The fact that the employment contract is with a Swiss company, the salary is paid in Swiss francs or the employer’s workplace is in Switzerland does not change the physical work location on a day worked from home.

Whether this actually requires employment income to be allocated between Germany and Switzerland depends on which treaty provision applies to the employee. The frontier-worker rule in Article 15a is particularly important.

Two basic situations

The tax consequences of working from home depend crucially on frontier-worker status

15a

Frontier worker under Article 15a

For a frontier worker resident in Germany, employment income is generally taxed in Germany. As the country where the employment is exercised, Switzerland may generally levy withholding tax of no more than 4.5%.

No frontier-worker status

If Article 15a does not apply, taxation generally follows the ordinary employment income rules. The actual work location then becomes particularly important when allocating employment income.

Frontier workers

Days worked from home in Germany are not non-return days

Germany and Switzerland have expressly agreed that full working days spent working at a frontier worker’s home do not count as days on which the employee fails to return home after work because of their employment.

A day worked from home in Germany is therefore not treated as a non-return day for the 60-day rule in Article 15a merely because the employee worked from home.

Residence in Germany
Workplace generally in Switzerland
Regular return to the German home
A day worked at home is not a non-return day
Monitor the 60-day rule separately
Swiss withholding tax of 4.5% may apply

Article 15a of the DTA

Working from home does not automatically end frontier-worker status

The frontier-worker rule generally requires a person resident in Germany to have their workplace in Switzerland and to return regularly from that workplace to their German home.

For the purpose of counting non-return days, a full day worked at the German home is not treated as if the employee had worked in Switzerland and then failed to return to Germany.

Days worked from home can therefore be compatible with the frontier-worker rule in an otherwise typical frontier-worker arrangement. Actual work-related non-return days arising in other circumstances must nevertheless continue to be counted separately.

Taxation of frontier workers

Where Article 15a applies, Germany generally remains the main taxing state

If the employee is resident in Germany for treaty purposes and meets the frontier-worker requirements, Germany may generally tax the Swiss employment income.

Switzerland may generally levy withholding tax of no more than 4.5% of gross remuneration, provided German residence is appropriately certified.

In this situation, days worked from home do not automatically require employment income to be apportioned between Germany and Switzerland by working days under the general rules in Article 15. The decisive issue is whether the special frontier-worker rule in Article 15a continues to apply.

Situation	Typical tax consequence	Points to check
Resident in Germany, working in Switzerland, qualifying as a frontier worker	Employment income generally taxable in Germany	Article 15a of the DTA
Full day worked at the German home	Not a non-return day	This does not automatically result in loss of frontier-worker status
Days worked in Switzerland	Swiss withholding tax generally limited to 4.5% where the frontier-worker rule applies	Certificate of residence
Work-related overnight stays	May qualify as non-return days	60-day rule

Outside Article 15a

Without frontier-worker status, days worked from home in Germany become particularly important when allocating employment income

If the frontier-worker rule does not apply, the general rules in Article 15 of the DTA must generally be applied. The physical work location is a key criterion.

A full day worked at home in Germany then generally counts as a day worked in Germany. Days worked at a Swiss office generally count as days worked in Switzerland.

Determine the total number of working days
Record days worked from home in Germany
Record days worked at the Swiss office
Allocate business trips to the country where the work was performed
Apportion remuneration by working days where necessary
Analyse bonuses and variable remuneration separately

Article 15 of the DTA

Outside the frontier-worker rule, employment income may need to be apportioned by working days

If an employee is not treated as a frontier worker under Article 15a, the assessment of regular remuneration generally requires a review of the days on which work was actually performed in Germany, Switzerland or a third country.

To the extent that working days are attributable to Germany, Germany generally has a taxing right as the country where the work is performed. Switzerland may have a taxing right over days worked in Switzerland.

Whether the so-called 183-day rule limits taxation in the country where the work is performed depends on the specific requirements of Article 15. Where the employer is Swiss, the 183-day rule must therefore not be understood as a blanket exemption for days worked from home in Germany.

Variable remuneration

Bonuses, share-based remuneration and remuneration covering several years often require a separate working-day analysis

SAL

Regular salary

Outside the frontier-worker rule, regular salary may need to be apportioned on the basis of the actual working days spent in each country.

BON

Bonuses

For bonus payments, it is necessary to identify the period of work to which the bonus economically relates. Only then can it be allocated between countries.

Share-based remuneration

For RSUs, options and other share-based remuneration, the relevant earning period may span several years and involve work in several countries.

German wage tax

Working from home does not automatically make a Swiss employer liable to withhold German wage tax

The fact that an employee receives employment income taxable in Germany does not automatically mean that the Swiss employer must withhold German wage tax.

A German wage tax withholding obligation requires a separate assessment of whether the foreign employer qualifies as an employer obliged to withhold tax under the German wage tax rules. A German permanent establishment, a permanent representative or particular employer arrangements may be especially relevant.

If the Swiss company has no German wage tax withholding obligation, the employee may nevertheless have to pay German income tax through an income tax assessment and, where applicable, advance income tax payments.

Practical payroll issues

What employers should review when an employee regularly works from home in Germany

PAY

German wage tax withholding

Check whether the Swiss employer is required to withhold German wage tax or whether German tax is collected from the employee through an income tax assessment.

REG

Registration

If German employer obligations arise, tax or social security registrations in Germany may be required.

DOC

Working-day records

The actual work location should be clearly documented for each working day. This is particularly important outside the frontier-worker rule.

Business taxation

An employee’s home office does not automatically create a German permanent establishment for the Swiss employer

The employee’s personal income tax and the taxation of the Swiss employer are separate issues.

An employee regularly working from Germany may make a permanent establishment analysis necessary. However, a German permanent establishment does not arise merely because an employee occasionally or regularly works at their private home.

Assess whether the home office is at the employer’s disposal
Consider the permanence of the working arrangement
Analyse the employee’s role
Review authority to conclude contracts
Assess permanent representative status separately where relevant
Evaluate German corporate income tax and trade tax risks

Permanent establishment risk

Whether the premises are at the employer’s disposal and the actual business function are decisive

A private home is typically at the employee’s disposal rather than the employer’s. This weighs against treating every home office automatically as a fixed place of business of the employer.

The assessment may change, however, if the employer requires the employee to work permanently from the German home, effectively uses the premises for its business activities or other circumstances indicate a greater degree of control over the premises.

Sales staff, senior employees and individuals who regularly conclude contracts for the Swiss company or perform a central business function from Germany may also raise representative and permanent establishment issues.

Social security

Social security follows different rules from income tax

The tax treatment under Article 15 or Article 15a of the DTA does not automatically determine which social security system applies to the employee.

Cross-border telework between Germany and Switzerland is subject to separate coordination rules. Germany and Switzerland apply the multilateral Framework Agreement on habitual cross-border telework.

Where its conditions are met, an employee may generally perform cross-border telework in Germany, their country of residence, for less than 50% of their total working time while remaining subject to the social security system of the country in which the employer has its registered office. For a Swiss employer, this generally means Switzerland.

<25 %

Below 25%

The ordinary coordination rules generally apply where work is habitually performed in several countries. In typical cases, telework accounting for less than 25% of total working time does not, by itself, result in a switch to the German social security system.

25–49.9

From 25% to below 50%

Where the conditions of the multilateral Framework Agreement are met, Swiss social security coverage may continue despite this proportion of work being performed from home in Germany.

≥50 %

50% or more

The special Framework Agreement for cross-border telework does not apply where working from home accounts for 50% or more of working time. The applicable social security system must then be assessed under the general rules.

A1 certificate

Continued Swiss social security coverage should be formally documented

Where the multilateral Framework Agreement is used, an appropriate certificate confirming the applicable social security legislation is required.

For a Swiss employer, the application is generally handled through the competent Swiss AHV compensation office. The A1 certificate provides evidence to German and other authorities of the social security system that applies.

The certificate used for frontier-worker tax treatment and the A1 social security certificate serve different purposes and should not be confused.

Limits of the telework framework

The 49.9% rule does not apply to every cross-border employment arrangement

The multilateral Framework Agreement is designed for specific situations involving habitual cross-border telework. Additional activities may prevent the special rule from applying.

3rd

Work in additional countries

Regular work in additional countries may prevent the special telework rule from applying, leaving the general coordination rules to determine the position.

2 EMP

Multiple employers

Employment with additional employers in other countries may affect the application of the simplified telework framework.

Self-employed activity alongside employment

Habitual self-employment alongside the employment relationship may require a separate social security assessment.

Documentation

Working from home between Germany and Switzerland should be documented day by day

Establish treaty residence

First establish clearly whether the employee is resident in Germany for the purposes of the DTA.

Determine frontier-worker status

Check whether Article 15a applies or whether the general employment income rules in Article 15 govern the tax treatment.

Record working days by location

Days worked from home in Germany, days worked at the Swiss office, business trips and work in third countries should be recorded separately.

Keep a separate record of non-return days

Actual work-related non-return days must not be combined with days worked from home in Germany.

Check the employer’s wage tax obligations

Where Germany has a taxing right, assess separately whether the Swiss employer itself must fulfil German wage tax obligations.

Review permanent establishment risk

Where working from home is a lasting arrangement, the employee has a senior role or holds authority to conclude contracts, the Swiss employer’s business tax position should be analysed.

Coordinate social security coverage and the A1 certificate

The extent of telework, additional activities and the employer structure must be assessed independently to determine the applicable social security system.

Typical arrangements

Working from home for a Swiss employer at a glance

Arrangement	Income tax	Social security
Frontier worker resident in Germany with occasional days worked from home	Article 15a may continue to apply; a day worked from home is not a non-return day.	Assess the applicable social security system separately.
Frontier worker regularly working from home for less than 25% of working time	Article 15a may continue to apply if its conditions are met.	Ordinary coordination rules apply; this proportion alone typically does not cause a change of system.
Frontier worker performing 25% to 49.9% of working time as telework	Assess the frontier-worker tax rule separately.	Swiss coverage may continue under the Framework Agreement.
Working from home for 50% or more of working time	Continue to assess the tax position under the DTA.	The Telework Framework Agreement does not apply; review the general rules.
No frontier-worker status under Article 15a	Generally analyse German and Swiss working days under Article 15.	A separate social security assessment is required.
Senior employee working permanently from Germany	Review employment taxation and any applicable special rules.	Also review employer obligations, permanent establishment issues and social security.

Common mistakes

Frequent misunderstandings about working from home in Germany for a Swiss employer

Counting every day worked from home as a non-return day

Under the agreement between Germany and Switzerland, a full working day spent at the German home specifically does not count as a non-return day under Article 15a.

Treating tax and social security in the same way

Income tax and social security are governed by different legal rules and thresholds.

Applying the 49.9% threshold to taxation

The threshold in the multilateral Telework Framework Agreement concerns social security. It is not a general tax exemption threshold for working from home.

Assuming the 183-day rule resolves every home-working issue

The 183-day rule cannot be applied in isolation. The employer, the work location and the special frontier-worker rule must be assessed together.

Assuming working from home in Germany automatically requires German payroll

Germany’s right to tax and the Swiss employer’s obligation to withhold German wage tax are two separate questions.

Ignoring permanent establishment risk entirely

Where working from home is a lasting arrangement and the employee performs relevant business functions, the Swiss company’s tax position should also be reviewed.

Working from home in Germany for a Swiss employer

Can I work from home in Germany for my Swiss employer?

Cross-border working from home is generally possible. However, it may have income tax, wage tax, social security and, in some cases, business tax consequences. The specific working arrangement should therefore be reviewed in advance.

Does a day worked from home in Germany count as a non-return day?

No. Germany and Switzerland have expressly agreed that a full working day spent working at home in the country of residence does not count as a non-return day for the purposes of Article 15a of the DTA.

Will I lose my frontier-worker status by working from home?

Not automatically. Full days worked at the German home are not non-return days. Whether Article 15a continues to apply overall nevertheless depends on the employee’s working arrangements and pattern of returning home as a whole.

Where is my Swiss employment income taxed if I am a frontier worker resident in Germany?

Where Article 15a applies, employment income is generally taxed in Germany as the country of residence. Switzerland may generally levy withholding tax of up to 4.5% of gross remuneration.

What happens if I do not qualify as a frontier worker under Article 15a?

The general employment income rules in Article 15 of the DTA then generally apply. Days worked from home in Germany generally count as days worked in Germany, while days worked at a Swiss office are generally attributed to Switzerland as the country where the work is performed.

Does my Swiss employer have to remit German wage tax?

Not automatically. Whether the Swiss employer itself must withhold German wage tax requires a separate assessment under the German wage tax rules. The employee may still owe German income tax even if no German wage tax is withheld.

Does my home office automatically create a German permanent establishment for my Swiss employer?

No. An employee’s private home office does not automatically create a permanent establishment of the Swiss company. However, the specific circumstances must be examined, particularly whether the premises are at the employer’s disposal, the permanence of the arrangement, the employee’s role and any authority to act on behalf of the company.

How much working from home is possible under the social security rules?

Where the conditions of the multilateral Framework Agreement are met, cross-border telework in Germany, the country of residence, may generally account for less than 50% of total working time while Swiss social security legislation continues to apply because Switzerland is the employer’s country.

Does the 49.9% rule mean that all income also remains taxable in Switzerland up to that threshold?

No. The 49.9% threshold concerns social security and is not a tax exemption threshold. Income tax is determined separately under the Germany–Switzerland DTA, particularly Article 15 or Article 15a.

Do I need an A1 certificate?

For cross-border telework, the applicable social security legislation should be formally determined. Where the multilateral Framework Agreement is used, an appropriate A1 certificate is generally required for this purpose.

Germany–Switzerland tax advice

Do you live in Germany and work partly from home for your Swiss employer?

We review frontier-worker status, days worked from home and other working days, German and Swiss income tax, potential employer wage tax obligations, permanent establishment risks and the interaction with social security. We coordinate the tax treatment between Germany and Switzerland.

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