The criteria that determine the right status, and the consequences for social security, taxation and payroll.
When a French company wants to send an employee to work abroad, one question comes up systematically: should you choose secondment or expatriation? This choice affects the employee's social protection, social contributions, taxation, payroll management, the employer's reporting obligations and the overall cost of the assignment.
Misclassification can lead to significant corrections, social or tax reassessments, and legal insecurity for both the company and the employee.
What is a seconded employee?
Secondment allows an employee to work temporarily abroad while retaining, under certain conditions, their affiliation to the French social security system. The French employment contract is maintained and the employer generally continues to pay French social contributions. This arrangement is particularly suited to temporary assignments: technical assistance, equipment installation, commercial assignments, international construction sites, training, and one-off interventions.
What is an expatriate employee?
Expatriation generally concerns longer assignments, or situations where continued affiliation to the French scheme is not possible. The employee then generally falls under the host country's social protection system. The company must organise social protection, local contributions, taxation, payroll management and administrative obligations.
The main differences
Social security. Under secondment, the employee can continue to benefit from the French scheme when conditions are met. Under expatriation, they generally fall under the host country's scheme.
Social contributions. Where contributions are paid depends directly on the status chosen. A poor analysis can lead to double contributions, back-payments, penalties, or difficulties during an audit.
Taxation. The choice of status does not automatically bring the same tax consequences; tax residence depends on the country of residence, length of stay, the applicable tax treaty and how the assignment is organised.
Payroll management. Depending on the situation, several arrangements are possible: French payroll only, local payroll, Split Payroll, or Shadow Payroll.
How to choose the right status
The choice depends on the length of the assignment, the destination country (existence of a social security agreement, tax rules, local obligations), the group's organisation, and the company's objectives (administrative simplicity, cost control, social protection, employee retention).
Most common mistakes
Our teams regularly encounter situations where the employee is declared expatriate when secondment was possible, contributions are paid in the wrong country, tax residence is poorly analysed, payroll isn't adapted to the status chosen, or international agreements aren't taken into account.
Why carry out an audit before departure?
A preliminary audit helps determine the most suitable status, identify social obligations, analyse tax consequences, organise payroll, prepare administrative documents, and secure the entire project.
Conclusion
The choice between secondment and expatriation should never be made out of habit or for purely administrative reasons. Each project has its own particularities requiring a tailored analysis. By preparing your mobility in advance and relying on specialised expertise, you protect your company and employees while optimising your international payroll.