Social insurance system
The German public social insurance system provides for pension
insurance, health insurance, nursing care insurance, unem-
ployment insurance, and accident insurance.
In general, social
insurance coverage is mandatory for all employees working
in Germany, regardless of their citizenship or the residence of
their employer. Employees temporarily transferred by a foreign
employer to a German branch of the same enterprise are exempt
from German social insurance contributions as a general rule.
In order to qualify for the exemption, employees must be able
to prove their intention to return to their home country, and
the foreign employer must retain the essential functions of an
employer, such as decisions about salaries, promotion, transfers,
The critical factor for the German authorities is whether the
employee will remain on the non-German payroll.