The European Court of Justice (ECJ) has confirmed that the 25% “substantial activity” test must be calculated using worldwide work activity, not only EU-based work.
This change affects how employers determine the correct social security system for employees working across multiple countries.
The ECJ also clarified that the assessment must use objective, measurable criteria specifically working time (hours) and/or remuneration assessed over a 12-month reference period.
How the 25% test is measured
- Working time (hours)
Authorities compare hours worked in the employee’s country of residence with total worldwide hours over 12 months. This is the primary method.
- Remuneration
Where hours are not a reliable indicator (e.g., sales executives, senior managers), authorities may compare income earned in the residence country with total worldwide income.
- Workdays (proxy for certain roles)
For roles without hour tracking, workdays per country may be used as a practical proxy for working time, provided they are recorded consistently and reflect actual activity.
Example of the 25% substantial activity test
Before (EU only hours)
- 420 working hours in residence country
- 1,200 total working hours in the EU
- 420 ÷ 1,200 = 35% = Meets the threshold
After (worldwide hours)
- 420 working hours in residence country
- 1,800 total working hours worldwide
- 420 ÷ 1,800 = 23.3% = Does not meet the threshold
What this means for social security coverage
If an employee falls below the 25% threshold:
- They cannot remain insured in their country of residence
- Social security must switch to the employer’s country of establishment
- Employer and employee contributions may move to a different Member State
- Pension, health, unemployment and other benefits will follow that new system
Existing A1 certificates remain valid, but all new applications and renewals must follow the updated worldwide activity calculation.
What employers should do now
- Put in place systems that accurately capture working hours, workdays, and remuneration across borders
- Forecast assignments and hybrid work patterns for the next 12 months
- Update internal policies to reflect the 25% rule and the worldwide activity requirement
- Identify employees whose social security position may change
- Prepare for A1 renewals using the updated calculation method
How Abbiss Cadres can help
Abbiss Cadres supports employers by:
- Applying the updated 25% calculation using worldwide activity
- Identifying employees whose coverage may change
- Preparing accurate A1 applications and renewals
- Reviewing and strengthening systems that track hours, workdays, and remuneration
- Forecasting employee mobility and hybrid work patterns for the next 12 months
- Updating internal policies to ensure alignment with the 25% rule
- Providing clear documentation to support audits and authority reviews
Abbiss Cadres helps ensure your organisation remains fully aligned with EU social security requirements.
Please feel free to contact us for more information.
