Seconding employees to the USA: taxes, salary and why day 184 matters

If you send an employee to the USA, you need to answer three questions before the first paycheck: Where is the employee tax resident? Who pays the salary, and who bears it? And which country collects the pension contributions? Tax treaties and social security agreements give clear answers, once you know their conditions.

For the tax office at home and for the IRS, sending an employee to the USA raises the same question from two sides: who gets to tax the salary? Whether your employee pays tax in the USA, at home or in both countries is decided not by the visa but by the tax treaty, and three things count there: the days spent in the USA, the employer who pays the salary, and who ultimately bears the cost. Social security runs separately, under its own agreements. For the employment and visa questions, see our overview on sending employees to the USA.

1Two countries, two questions: residence and place of work

For foreign nationals without a green card, US residence is decided by the Substantial Presence Test. You are resident if you spent at least 31 days in the USA in the current year and reach at least 183 days over three years, counted like this: all days of the current year, one third of the days of the previous year and one sixth of the days of the year before that. The IRS gives its own example: someone who spent 120 days in the USA in each of three years reaches 120 plus 40 plus 20, so 180 days, and is not resident.

If you are resident under both countries' laws, the treaty makes you resident in only one of them. The treaty with Germany, for example, works through a sequence of tests: permanent home, center of vital interests, habitual abode and nationality. If those tests make you resident in Germany, you are treated as a nonresident for US income tax, even if you meet the Substantial Presence Test. Treaty residence is the starting point for everything else, because the 183-day rule only protects you if you stay resident in your home country.

2The 183-day rule and its three conditions

The basic principle of Article 15 of the treaties is simple: wages are taxed where the work is done. If you work in the US, the US may tax your pay. The exception designed for short assignments requires three conditions, and all three must be met at the same time:

• The employer. Your salary is paid by an employer that is not resident in the US, or by someone on its behalf.
• The permanent establishment. Your salary is not borne by a permanent establishment the employer has in the US.

If one condition is missing, the exception does not apply, and it fails for the whole period. If you have spent 184 days in the US by year end, you do not lose the protection only from day 184: you lose it for all the pay attributable to your US work. That is why every assignment needs a reliable day count, using the travel dates in your passport or your I-94 record.

3Who pays the salary and who bears it

The second and third conditions often decide things before the day count does. If the US subsidiary pays the salary, the employer is resident in the US and the exception does not apply, even for a four-week assignment. The same goes when the salary is borne by a permanent establishment the European company maintains in the US, such as a branch. Whether recharging payroll costs to the US subsidiary means the conditions are no longer met depends on how the arrangement is structured in each case, and that belongs before the assignment, not in the tax return afterward.

The visa often shapes how this works:

• B-1 and ESTA: For business trips, the State Department requires that the employee receives no salary from a US source. The salary continues to be paid by the company at home.
• H-1B: The employer must be a US company that pays the wage under the Labor Condition Application. That usually rules out the short-stay exemption under Article 15 of the tax treaty.
• L-1 and E-2: Whether the salary is paid by the company in Europe, by the US entity, or split between them depends on the structure. On a secondment lasting several years, the days exceed 183 anyway, so the USA can generally tax the salary.

Which visa fits which secondment is covered in Which visa for a secondment?. If the employee doesn't work in the USA at all but works from home for the US company, different rules apply; the contract side is covered in our article on the employment contract without a US presence.

Your social security agreement with the United States

Each of these countries has its own social security agreement with the United States. In each one, a posted employee stays in the home system for a limited period, the self-employed are covered where they live, and a certificate of coverage proves which system applies. The details, including how contribution periods are added up for benefits, differ by country.

Norway. The agreement signed in Oslo on 30 November 2001 has been in force since 1 September 2003 and replaced an earlier agreement. If your employer sends you to the US for an assignment not expected to last more than 5 years, you stay only in the Norwegian system. A spouse and children who accompany you are covered the same way while they do not work in the US. When you are sent from Norway, the rule applies only if you are on a Norwegian payroll as determined by Norwegian legislation. If you are self-employed, you are covered only where you reside. To establish an exemption from US Social Security contributions, US employers and self-employed workers must request a certificate of coverage from NAV's national office for social insurance abroad in Oslo. Periods are added up. With at least three years of Norwegian coverage, or one year if you were covered while working in Norway, US quarters count towards Norwegian old-age, disability and survivors pensions, and four US quarters equal one Norwegian year. On the US side, Norwegian credits count towards a partial US benefit only if you have at least six US credits.

Sweden. The agreement was signed in Stockholm on 27 May 1985 and entered into force on 1 January 1987. A Supplementary Agreement signed on 22 June 2004 has applied since 1 November 2007. If your employer sends you to the US for a period not expected to exceed 60 months, you stay only under Swedish law. An affiliated or subsidiary company counts as the same employer, provided the work would have been covered in the sending state without the agreement. If you are self-employed and would be covered in both states, you are covered only where you reside. For posted workers, a certificate issued in Sweden by the National Social Insurance Board or its authorised delegate proves which law applies. Where your Swedish periods are insufficient, periods in both states are added together, with four US quarters counting as one Swedish year. This does not apply to the three-year Swedish residence requirement for the guarantee pension, and the agreement does not export the guarantee pension to the US. On the US side, Swedish periods count only if you have at least six quarters of US coverage.

Denmark. The agreement was signed on 13 June 2007 and has been effective since 1 October 2008. The posting limit is asymmetric. If you live and work in Denmark and a Danish employer sends you to the US, you stay only under Danish law if the assignment is not expected to exceed three years. A US employee sent to Denmark can stay in the US system for up to five years. If you are self-employed, you are covered only where you reside. The certificate of coverage that proves your exemption from US Social Security contributions is requested from Udbetaling Danmark, International Pension & Social Security, Hillerød. On the Danish side, the agreement covers the folkepension and ATP. With at least six US quarters, the US counts your Danish coverage and Danish residence periods with work towards a pro rata US benefit. US credits are not counted for ATP, which can be earned with as little as one month of ATP coverage.

Finland. The agreement was signed on 3 June 1991 and has been effective since 1 November 1992. If you are posted to the US, you stay only under Finnish law if the posting is not expected to exceed 5 years, or longer if the competent authorities agree in your case. An affiliated or subsidiary company is treated as the same employer. If you are self-employed and would be covered in both states, you are covered only where you reside. SSA states that self-employed workers who transfer their business to the other country for one year or less stay covered in the country they came from. The certificate of coverage is requested from the Finnish Centre for Pensions (Eläketurvakeskus). You are covered by the Finnish national pension only while resident in Finland. With at least six US quarters, the US counts your Finnish periods towards a pro rata US benefit. For Finnish employment pensions, US periods count only in a disability or death case that fails the residence or 360-day coverage condition. Otherwise Finnish law alone applies.

The United Kingdom. The agreement was signed on 13 February 1984 and entered into force on 1 January 1985. Its benefit provisions took effect on 1 January 1988, and a supplementary agreement has applied since 1 September 1997. If your employer sends you to the US for a posting not expected to exceed 5 years, or a longer period agreed by the competent authorities, you stay covered only in the UK. If you are self-employed, you are covered only in the country where you ordinarily reside. To be exempt from US Social Security contributions, the employer or self-employed worker must request a UK certificate of coverage from HMRC. If you have at least six US quarters but not enough for US entitlement, the US counts your UK periods.

Ireland. The agreement was signed in Washington on 14 April 1992 and entered into force on 1 September 1993. If you are sent to the US for employment not expected to exceed five years, or a longer period agreed by the competent authorities, you stay covered only in Ireland. An affiliated company is treated as the same employer. If you are self-employed and would be covered in both countries, you are covered only where you are ordinarily resident. The certificate that proves your exemption is named in the agreement as issued by the Scope Section of the Department of Social Welfare. SSA directs requests to the PRSI Special Collection Section in Waterford. Periods are added up in both directions. The US counts Irish periods if you have at least six US quarters, and Ireland counts US periods if you have at least 52 Irish contribution weeks but not enough for Irish entitlement.

The Netherlands. The agreement was signed in The Hague on 8 December 1987 and, with a protocol of 7 December 1989, has been in force since 1 November 1990. A second protocol has applied since 1 May 2003. If your employer sends you to the US for a period not expected to exceed 5 years, you stay only under Dutch law. If you are self-employed, you are subject only to the laws of the country where you reside. If you live in the Netherlands and work there, Dutch law alone applies to your work in either country, unless the posting rule applies. On request, the institution of the country whose laws apply issues a certificate proving your exemption from the other country's coverage. Rules that restrict old-age, invalidity or survivors cash benefits for people living abroad do not apply if you live in the US. The US counts Dutch periods if you have at least six US quarters, but not periods credited solely on the basis of residence in the Netherlands.

Switzerland. The agreement signed in Bern on 3 December 2012 has been in force since 1 August 2014 and replaced the 1980 agreement. If you are sent to the US for a period not expected to exceed 5 years, you stay only in the Swiss system. The competent authorities may agree an exception or an extension. A spouse and children living with you who do not work themselves stay in the same system. If you are self-employed, you are covered only where you reside. Your employer in Switzerland requests the certificate of coverage, form CH/USA 10, from the compensation fund that collects your Swiss contributions. Swiss periods are added to US periods only for the Swiss disability pension, and only if you have at least one year of Swiss periods. The amount is based on Swiss periods alone.

Country by country, with every source: Moving to the USA: your home-country tax

Sources

1. SSA, U.S.-Norwegian Social Security Agreement (agreement text and administrative arrangement of 30 November 2001), archived snapshot of 21 Apr 2026
2. SSA, Totalization Agreement with Norway (pamphlet), archived snapshot of 26 Sep 2026
3. SSA, U.S.-Swedish Social Security Agreement (agreement of 27 May 1985 as amended by the Supplementary Agreement of 22 June 2004, with administrative arrangement), archived snapshot of 11 Jul 2026
4. Lag (2004:1192) om konvention mellan Sverige och Amerikas förenta stater om social trygghet, as amended up to SFS 2007:807 (Riksdagen open data)
5. SSA, U.S. International Social Security Agreements: status table (web.archive.org snapshot of 16 June 2026)
6. SSA, Agreement on Social Security between the United States and the Kingdom of Denmark, signed 13 June 2007 (agreement text page, web.archive.org snapshot of 20 April 2026)
7. SSA, Totalization Agreement with Denmark (pamphlet page, web.archive.org snapshot of 20 April 2026)
8. SSA, Agreement on Social Security between the United States and Finland, signed 3 June 1991 (agreement text page, web.archive.org snapshot of 11 July 2026)
9. SSA, Totalization Agreement with Finland (pamphlet page, web.archive.org snapshot of 16 June 2026)
10. SSA, U.S.-U.K. Social Security Agreement (agreement text page)
11. SSA, Totalization Agreement with United Kingdom (section: United Kingdom certificates for employees and self-employed workers)
12. SSA, U.S.-Irish Social Security Agreement (agreement text page)
13. SSA, Totalization Agreement with Ireland (section: Irish certificates for employees and self-employed workers)
14. SSA, U.S.-Netherlands Social Security Agreement (agreement text page)
15. SSA, Agreement text: US-Switzerland social security agreement of 3 December 2012 (web.archive.org snapshot of 13 May 2026)
16. SSA, Totalization Agreement with Switzerland (pamphlet; web.archive.org snapshot of 17 Jun 2026)

Your income tax treaty with the US: dividend rates and pensions

Each treaty caps the tax the source country may charge. For US shares you hold, that cap is the most the US may withhold on dividends paid to you. The first table shows the dividend caps. The second shows which country may tax your pensions.

Country (treaty, amending protocol)	Portfolio dividends	Company holdings	0% for parent companies	0% for pension funds
Norway (1971, protocol 1980)	15%	15%; no lower rate for corporate shareholders	None	None; the treaty has no 0% dividend rate
Sweden (1994, protocol 2005)	15%	5% for a company owning at least 10% of the voting power	Company owning 80% or more of the voting power for the 12 months ending on the date entitlement is determined, that also meets named limitation-on-benefits tests in Article 17	Yes, if the dividends do not derive from a trade or business of the fund and the holding is not sold within two months of acquisition
Denmark (1999, protocol 2006)	15%	5% for a company holding directly at least 10% of the share capital, with no minimum holding period	Company owning 80% or more of the voting power for 12 months, that also meets one of the Article 22 limitation-on-benefits tests named there	Yes, unless derived from a business carried on by the fund or through an associated enterprise
Finland (1989, protocol 2006)	15%	5% for a company owning directly at least 10% of the voting stock	Company owning 80% or more of the voting power for 12 months, that also meets one of the Article 16 limitation-on-benefits tests named there	Yes, unless derived from a business carried on by the fund or through an associated enterprise
United Kingdom (2001, protocol 2002)	15%	5% for a company holding directly or indirectly at least 10% of the voting power	Company owning 80% or more of the voting power for the 12 months ending on the declaration date, that also held 80% before 1 October 1998, is a listed-company qualified person under Article 23(2)(c), qualifies under derivative benefits or has a competent authority determination	Yes for a pension scheme, unless derived from a business carried on by the scheme
Ireland (1997, amending convention 1999)	15%	5% for a company owning at least 10% of the voting stock	None; Article 10 provides no lower rate	None in Article 10
Netherlands (1992, protocols 1993 and 2004)	15%	5% for a company holding directly at least 10% of the voting power	Company owning directly 80% or more of the voting power for the 12 months ending on the declaration date, that also held 80% before 1 October 1998, is a listed-company qualified person under Article 26(2)(c), qualifies under Article 26(3) or has a competent authority determination	Dividend and interest income of an exempt pension trust is exempt, except income from a trade or business or from a related person
Switzerland (1996, protocol 2009)	15%	5% for a company holding directly at least 10% of the voting rights	None	Yes for a pension fund, similar institution or individual retirement plan, subject to competent-authority recognition and not if it controls the payer

Treaty benefits can depend on extra tests. In the Irish treaty, you get benefits only as a qualified person under the limitation-on-benefits article. The Swedish treaty has a similar limitation-on-benefits article. The Norwegian treaty instead denies the dividend article to certain companies that enjoy special low-tax measures.

Country	Private and occupational pensions	Social security pensions
Norway	Taxable only in your state of residence; alimony and annuities likewise	Taxable only in the paying state, so a Norwegian folketrygd pension paid to a US resident is taxable only in Norway
Sweden	Taxable only in your state of residence, annuities included	Taxable only in the paying state, including the Swedish allmän tilläggspension
Denmark	Taxable only in the source state, where the paying scheme is established; this covers periodic payments and single sums, and only tax-approved schemes (on the Danish side, schemes under PBL afsnit I). Annuities are taxable only in your state of residence	Taxable only in the paying state
Finland	Taxable only in your state of residence; annuities likewise	Taxable only in the paying state
United Kingdom	Taxable only in your state of residence; a lump sum is taxable only in the state where the scheme is established	Taxable only in your state of residence, for example the UK State Pension
Ireland	Taxable only in your state of residence; annuities likewise	Taxable only in your state of residence
Netherlands	Taxable only in your state of residence, annuities included. The other state may tax non-periodic remuneration for work done there, or a lump sum paid instead of an annuity, if you lived there at any time in the five years before payment	Taxable only in the paying state, which covers AOW, Anw, WAO, WIA, Waz and Wajong benefits
Switzerland	Taxable only in your state of residence	Taxable in your state of residence; the paying state may also tax up to 15% of the gross amount

If you are a US citizen, the saving clause lets the US tax you as if the treaty did not exist. The exceptions to that clause differ by treaty.

• The social security rule survives in the Norwegian, Swedish, Danish, Finnish, UK, Irish and Dutch treaties.
• In the Danish treaty, the pension source rule survives as well.
• The UK lump-sum rule does not survive.
• The Swiss social security article is not in the general exception list.

Country by country, with every source: Moving to the USA: your home-country tax

Sources

1. Lovdata, Norges traktater: Overenskomst mellom Norge og USA (03-12-1971 nr 1), register entry
2. Lovdata, Norges traktater: Protokoll om endring i Overenskomst mellom Norge og USA (19-09-1980 nr 1), register entry
3. United States-Norway Income and Property Tax Convention of 3 December 1971, with the Protocol of 19 September 1980 (IRS treaty text, norway.pdf)
4. U.S. Department of State, TIAS 06-831: Convention between the United States and Sweden signed 1 September 1994, with the Protocol signed 30 September 2005
5. Lag (1994:1617) om dubbelbeskattningsavtal mellan Sverige och Amerikas Förenta Stater, as amended up to SFS 2011:1368, with the convention as amended by the 2005 protocol in the annex (Riksdagen open data)
6. Skattestyrelsen, Den juridiske vejledning 2026-2, C.F.9.2.20.5.1 USA - DBO'ens baggrund, formål og historik
7. Retsinformation, BKI nr. 1 af 18. februar 2008, Bekendtgørelse af protokol af 2. maj 2006 til ændring af overenskomsten af 19. august 1999 mellem Danmark og USA
8. Protocol amending the 1999 United States-Denmark income tax convention, signed at Copenhagen 2 May 2006 (IRS text)
9. Skattestyrelsen, Den juridiske vejledning 2026-2, C.F.9.2.20.5.2 USA - Gennemgang af DBO'en
10. Convention between the United States and Denmark for the avoidance of double taxation, signed 19 August 1999 (IRS treaty text with Senate transmittal)
11. Convention between the United States and Finland for the avoidance of double taxation with respect to taxes on income and on capital, signed 21 September 1989 (IRS treaty text with ratification history)
12. Finlex, Suomen säädöskokoelman sopimussarja 2008 N:o 2-3: Laki and Tasavallan presidentin asetus on the protocol amending the Finland-United States tax convention (SopS 3/2008)
13. Protocol amending the 1989 United States-Finland convention, signed at Helsinki 31 May 2006 (IRS text)
14. HMRC, USA: tax treaties (GOV.UK, last updated 9 August 2021)
15. US-UK Income Tax Convention of 24 July 2001 (US Treasury text)
16. Protocol of 19 July 2002, Article I (new Article 1(5) of the Convention)
17. Department of Foreign Affairs, Irish Treaty Series No. 16 of 2000
18. Department of Foreign Affairs, Irish Treaty Series No. 24 of 2000
19. Ireland-US Income Tax Convention 1997, Article 10(2)
20. Ministry of Finance, Verdragen op het gebied van directe belastingen per 1 oktober 2026
21. Protocol of 8 March 2004, Article 3 (new Article 10(2) of the Convention)
22. Netherlands-US Income Tax Convention 1992, Article 35(1)
23. Belastingdienst, Verdragsstaten IB - Niet-ingezetenen (January 2026), Verenigde Staten van Amerika
24. Fedlex RS 0.672.933.61, Convention between Switzerland and the United States on taxes on income of 2 October 1996, consolidated French version (état le 13 octobre 2022)
25. SFI, Liste des conventions de double imposition (état au 01.01.2026)

4The American side: resident or nonresident

If the US has the right to tax, what matters is how the employee is classified there. A resident alien is taxed like an American on worldwide income and files Form 1040. A nonresident alien is taxed only on US-source income and on income from work in the USA, and files Form 1040-NR. Pay for work performed in the USA is generally US-source income. A narrow exception applies only to stays of no more than 90 days with no more than $3,000 in pay from an employer with no US trade or business.

Three situations come up often with secondments:

• Fewer than 183 days in the year, but the test is met. If you stay under 183 days in the current year, keep a tax home abroad throughout, have a closer connection there and have taken no steps toward a green card, you can remain a nonresident under the Closer Connection Exception. Form 8840 is used for this.
• The year of arrival and the year of return. If you become a resident or stop being one during a year, you have a dual-status year: part as a nonresident, part as a resident, with its own filing rules.
• Treaty residence at home. If you are resident in your home country under the treaty rules, you are treated as a nonresident for US income tax and disclose this position on Form 8833.

We handle your employee's US tax return, with both countries in view.

5Withholding, FICA and US payroll

If a US company pays the salary, it withholds federal income tax from wages and remits it. On top of that come payroll taxes under the Federal Insurance Contributions Act, FICA for short: 6.2 percent for Social Security and 1.45 percent for Medicare, each from the employee and again from the employer. In 2026, Social Security applies to wages up to $184,500; Medicare has no cap. On wages over $200,000 in a calendar year, the employer also withholds 0.9 percent Additional Medicare Tax, with no employer share.

FICA doesn't depend on your citizenship or your residency: according to the IRS, these taxes generally apply to wages for work performed in the US, no matter where the employee and the employer come from. The only exemption comes from a social security agreement, provided you have the certificate from your home country.

The federal level is only part of payroll. States and cities have their own withholding taxes and levies, and which ones apply depends on where the work is done. For the US company, that means registering as an employer, running payroll, filing reports and issuing Form W-2 at year end. Our article Payroll in the USA explains how US payroll works.

6Social security: agreements and certificates

Social security is not governed by the tax treaties but by separate social security agreements, such as those the US has with Germany, Austria and Switzerland. The core idea is the same everywhere: if your employer sends you temporarily to the other country, you stay in your home system for up to five years and pay no contributions for those programs in the host country.

7The home side: exemption, exemption with progression and credit

Where the US has the right to tax, the home country must avoid double taxation. The three countries handle this differently.

If you give up your home completely and move to the USA, that's a different case: your full tax liability at home ends, with consequences of its own. Our article Moving: taxes in your home country walks you through the taxes back home when you relocate.

8What the assignment contract should say about pay

The rules above show what belongs in an assignment contract or side agreement before your employee boards the plane:

• Who the employer is and who pays: the company at home, the US company, or both with separate salary portions, in which currency and into which account.
• Who bears the cost: whether and how payroll costs are recharged to the US company, aligned with the tax structure between parent and subsidiary.
• The duration: planned days in the US per calendar year and per twelve months, and the five-year limit for social security.
• The tax returns: who prepares and pays for the returns in both countries, and who bears any extra tax caused by the assignment.
• The return home: what happens to pay, insurance and housing at home if the assignment ends early.

Our Tax Strategy sets out the structure between your parent company at home and its US subsidiary, including how staff costs are recharged. For the cost of the visa itself, see H-1B costs and fees for the H-1B and, for the L-1, L-1 costs and fees.

In short

• Under the treaties with Germany, Austria and Switzerland, for example, wages remain taxable only at home if three conditions are met: no more than 183 days in the US, an employer outside the US pays, and no US permanent establishment bears the salary.
• In the US, the Substantial Presence Test decides residency; FICA is 6.2 and 1.45 percent on each side.
• With a certificate under the social security agreement, the employee stays in the home system for up to five years and is exempt from US Social Security.

How we help you

• Visa consultationFind out which route to the USA is open to you.
• PayrollPayroll, payroll taxes and filings for your employees in the USA.
• Tax StrategyA clean structure between parent company and US subsidiary, or between you and your US company, coordinated with your accountant.
• Your US Tax ReturnForm 1040 or 1040-NR, handled in English.
• US Tax ConsultationYour US tax question, answered by people who know both sides.