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 your clients assess the correct social security position for their employees working across multiple countries.
The ECJ also clarified that assessments must be based on objective, measurable criteria, specifically working time (hours) and/or remuneration, evaluated over a 12-month reference period.
How the 25% test is measured
- Working time (hours)
Authorities compare the hours your clients’ employees work in their country of residence with their total worldwide working hours over a 12-month period. This remains the primary method.
- Remuneration
Where working hours are not a reliable indicator (for example, for sales executives or senior managers), authorities may compare income earned in the country of residence with total worldwide income.
- Workdays (proxy for certain roles)
For roles where hours are not tracked, workdays per country may be used as a practical proxy, provided your clients maintain consistent and accurate records reflecting 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 your clients’ worldwide hours fall below the 25% threshold:
- They may no longer remain insured in their country of residence
- Social security may need to 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. However, all new applications and renewals must follow the updated worldwide activity calculation.
What your clients should do now
- To remain compliant, employers should ensure they:
- Implement systems that accurately capture working hours, workdays, and remuneration across borders
- Forecast employee assignments and hybrid working patterns over a 12-month period
- Update internal policies to reflect the 25% rule and worldwide activity requirement
- Identify employees whose social security position may change
- Prepare for A1 certificate renewals using the updated calculation method
How Abbiss Cadres can help you support your clients
Abbiss Cadres can help :
- Applying the updated 25% calculation using worldwide activity
- Identifying employees whose social security coverage may change
- Preparing accurate A1 applications and renewals
- Reviewing and strengthening systems used to track hours, workdays, and remuneration
- Forecasting employee mobility and hybrid working patterns
- Updating internal policies to ensure alignment with the 25% rule
- Providing clear documentation to support audits and authority reviews
Abbiss Cadres helps ensure your clients remain fully aligned with EU social security requirements.
Please feel free to contact us for more information.
