Salary split: taxes across multiple countries

In international employment, there is often a salary split : the employee's salary is taxed in multiple countries. There are two forms:

1. Formal salary split

The employee has multiple official employers in different countries. He receives wages from each country and pays taxes there too.

2. Actual salary split

The employee has only one employer, but works (regularly) in multiple countries. He is then taxed in each country where he is active — based on the number of days worked.

A salary split is often seen as fiscally advantageous by employees. After all, several countries apply lower tax rates on lower incomes. But for you as an employer it is a complex story with double declarations, deductions in several countries and the need for correct fiscal interpretation.

Example : an employee lives in the Netherlands, but works a few days a week in Belgium. His Belgian working days are taxable here, the Dutch days in the Netherlands. Without proper planning and follow-up, errors or fines can result.

Split payroll and shadow payroll: the practical side

In the case of a de facto split, you may need to set up a local payroll in the country where the employee is active. You do this to calculate social and fiscal contributions correctly. The salary payment is made from your head office, but the 'shadow payroll' ensures that you meet the obligations in the other country.

Please note: you must first register with the government services in that country before employing anyone there.

Social security: the A1 form

Your employee's social security contributions must be correctly arranged from day 1. Within the EU, an employee may only fall under one social security system, even if he works in multiple countries. For this, you as an employer request an A1 form .

This document proves that the employee is correctly affiliated to the Belgian system. Is there no A1? Then you risk double contributions or administrative sanctions in the other country.

Outside the EU? Check whether there is a bilateral social security agreement with Belgium.

Limosa notification: don't forget!

Are you a foreign employer who temporarily lets people work in Belgium? Then you are required to make a Limosa notification in advance. Belgian employers must also be alert when working with foreign subcontractors.

This notification is done digitally via the Belgian government and serves to prevent social fraud. Do you forget this? Then you as an employer can be liable for fines.

Finally, get guidance

International payroll and cross-border employment are not subjects to improvise. The combination of different fiscal regimes, social security systems and administrative obligations makes this an error-prone matter.

Would you like to stay informed about everything related to social-legal legislation or payroll? Contact Rovoco!