Analysis by Eva María Blázquez Agudo, Professor of Labour and Social Security Law at Universidad Carlos III de Madrid, social security expert, and EMS contributor.

Accepting a position in another country, even within the same company, can have significant implications that should be carefully considered before agreeing to work abroad.

In addition to personal and family considerations, there are three key factors that should be assessed before accepting an international assignment: the impact on compensation, social security coverage, and taxation.

As a general rule, regardless of any specific regulations that may apply between the countries involved, employees typically retain their existing salary package, which is often adjusted to compensate for the relocation based on the terms negotiated between the parties.

In addition, when employees relocate from one country to another, companies often cover a variety of relocation-related expenses. These costs may include initial travel expenses for the employee and their family, additional trips home during a specified period, moving expenses, accommodation, healthcare coverage, and schooling for dependent children, among other benefits.

Beyond these matters, which are typically negotiated between the parties, it is important to consider the tax and social security implications when deciding whether an international assignment is worthwhile.

From a tax perspective, rules designed to prevent double taxation generally apply between the home and host countries. As a result, the employee will usually be required to pay taxes in only one jurisdiction. It is therefore important to review the applicable regulations and determine whether the assignment may result in a higher overall tax burden.

Finally, perhaps the most important consideration relates to social security. This should be assessed from two perspectives. First, it is necessary to determine where contributions must be paid and how this will affect the employee. It is equally important to understand the impact that the assignment may have on future social security benefits, particularly retirement pensions.

With regard to social security contributions, the principle of avoiding double contributions generally applies. As a result, both the employee and the employer will typically contribute to only one social security system.

In any case, determining the applicable rules requires reviewing any bilateral agreements between the authorities of the home and host countries, multilateral agreements (such as the Ibero-American Social Security Convention), or European coordination regulations in the case of assignments between European Union Member States.

These frameworks establish, to varying degrees, how contributions made in different countries are coordinated for the purpose of accessing future social security benefits, particularly retirement pensions, as well as which contributions must be made to the social security systems of the home and host countries in each specific case.

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