National Insurance - Social Security Planning Tips

  • As a general rule, contributions are only payable in one country – there are exceptions but only in complex cases
    It is not safe to believe that you will necessarily pay contributions in the country where you pay tax.
  • Employer contributions will almost certainly fall due in the country where the employee contributions are due – but if the company has no presence there then they may not be due at all
  • For intra EU and Reciprocal Agreement assignments you should be able to obtain official clearance over where the contributions liability falls – failure to do so can lead to contributions being collected in both countries
  • Common Reciprocal Agreement countries are USA, Canada, Japan and Israel. Notable omissions are India, China, South Africa, Australia and for most practical purposes, New Zealand
  • If an employee is assigned between two countries within the EU then the home country liability may continue for one, two or up to five years depending on the paperwork
  • If a UK employee is seconded abroad for less than a year then he is likely to remain within the UK NIC and if someone comes on assignment from the USA then they are likely to remain within the US system for 5 years
  • The position becomes much more complicated where the employment is exercised in two or more countries and some jurisdictions will try to collect contributions even after only a few days work, unless exemption is proved