European Court of Justice: work carried out in third countries also counts when determining the applicable social security legislation

The EU Court of Justice issued an important ruling on 11 December 2025 concerning the question of which social security legislation applies to employees who work in multiple countries (Case CJ0743/23).
The essence of the ruling is that when assessing whether an employee undertakes a "substantial part" of their work in the home state, work carried out in third countries should also be taken into account.

Background to the case

The case concerned an employee living in Germany who was in the service of a Swiss employer and worked in:

• Germany: approximately 16%
• Switzerland: approximately 16%
• Various third countries outside the EU: approximately 68%

Based on the above work pattern, the German social security authority considered that only work within the EU was relevant to the question of whether the employee spent more than 25% of their time working in the country of residence. Based solely on the European working days, this employee would spend more than 25% of their time working in the country of residence and, under the main rule, would therefore be subject to the German social security system.

Court ruling

The Court ruled that all the employee’s work is relevant when determining whether more than 25% of it is carried out in the country of residence. In this specific case this meant the working days spent in Germany, Switzerland and the various third countries outside the EU. Given that the employee spends only 16% of the time working in Germany, the Court ruled that this person falls under the social security system of the member state where the employer is based, i.e. Switzerland.

Important points to take into account in practice

In practice, a ‘substantial part’ has already been explained by the Social Insurance Bank (SVB) based on the number of working days. This ruling will therefore mainly be relevant in situations where the employee lives in another country than where the employer is based and where the employee also often works outside the EU. We recommend that you identify as quickly as possible which employees might be affected by this ruling. These will be people who are active in multiple countries, including third countries. You are welcome to contact your EY advisor to discuss how this ruling could affect those employees.