According to the relevant double taxation and social security agreements, on principle, taxes and contributions are payable in the country in which you are employed, i.e. in the USA. However, there are exceptions in matters such as pension schemes for those posted abroad by German employers and taxes on periods of less than 6 months.
On principle, employers based abroad are also obliged to pay social security contributions in Germany. However, by agreement, the obligation to pay may be transferred to the employee. It is also possible for an employer in Germany who has sent someone abroad to pay the contributions.
According to the old Regulation (EEC) 1408/71 which still is applicable to US citizens partly working in Ireland, a person who is habitually employed in the territory of two EU Member States is subject to the social security regulations in the country in which he or she is living if he or she carries out part of their work in this country. In the case described, this would mean social security contributions would be paid in Germany. If the person concerned were a citizen of an EU Member State, the new Regulation (EC) 883/04 would apply. Even according to the new provisions of Regulation (EC) 883/04, a person who is habitually employed in the territory of two EU Member States is subject to the social security regulations of the country in which he or she is living if he or she carries out part of their work in this country. In contrast to the old regulations, at least 25% of a person's work must be conducted in the country in which he or she is living. If the proportion of work conducted in the country of residence is less than 25%, according to the new regulations statutory social security automatically passes to the other country.
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Last updated: 11 January 2022