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, a secondment to the USA is the same question asked from two sides: who gets to tax the salary? Whether your employee pays tax in the USA, at home or in both countries is not decided 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 it. Social security runs separately under its own agreements. For the employment and immigration side, see our main guide Seconding employees to the USA. This page goes into tax and salary.

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

In the USA, foreigners without a green card are judged 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.

3Who pays the salary and who bears it

The visa often sets the framework:

• B-1 and ESTA: For business trips, the State Department requires that the employee receives no salary from a US source. The salary keeps running through 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: Here it depends on the structure whether the salary is paid by the company in Europe, by the US entity, or split between them. On a secondment lasting several years, the days exceed 183 anyway, so the USA can as a rule 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.

4The American side: resident or nonresident

If the USA can 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 the wage and pays it over. On top come the 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 citizenship or residence: according to the IRS, it generally applies to pay for work in the USA, wherever employee and employer come from. Only a social security agreement exempts you, once the home country's certificate is in place; more on that in the next section.

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. How US payroll works is explained in our article Payroll in the USA.

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 concept sets out the structure between your parent company at home and its US subsidiary, including the recharging of personnel costs. The cost of the visa itself is covered for the H-1B on H-1B costs and fees and for the L-1 on L-1 costs and fees.

In short

• In the US, the Substantial Presence Test decides residency; FICA is 6.2 and 1.45 percent on each side.

How we help you

• Visa RoadmapIn writing: which visa fits you and your family, prepared with the immigration attorney on the firm's team.
• PayrollPayroll, payroll taxes and filings for your employees in the USA.
• Tax structureA 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.