Welcome to the FAQ section of FRADECO – your partner for tax consulting, payroll, social security, and international tax issues.
In our frequently asked questions (FAQ), you will find quick and easy-to-understand answers to all topics related to taxes, payroll accounting, statutory accident insurance, contribution reports, and working with FRADECO. Our goal with this FAQ page is to give you a clear overview of frequently asked questions – whether you are an employer, HR manager, or internationally active company.
In addition to general information on payroll processes and social security reporting requirements, you can also find out how FRADECO supports you in the correct processing of payroll, contributions, and tax returns.
If your question is not answered in this FAQ, our service & info section and our contact form are available to you at any time.
In France, social security contributions and taxes are deducted directly from gross wages via the “Prélèvement à la source” system, whereas in Germany, income tax and social security contributions are reported and paid separately. FRADECO ensures that your payroll processing in both countries is carried out correctly, in compliance with legal requirements, and on time.
Yes. We support companies with German-French teams and take care of all payroll processing, including payroll accounting, reporting to French Urssaf offices or German authorities, and communication with the respective authorities.
We require personnel master data, employment contracts, information on social security status, tax identification numbers, and any A1 certificates. We check all documents for completeness and then submit the notifications to the German and French authorities.
- The active pension will apply from January 1, 2026: Anyone who has reached the statutory retirement age (usually 67, including transitional arrangements for those born before 1963) can earn up to EUR 2,000 per month (EUR 24,000 per year) tax-free as an employee subject to social security contributions.
- The tax-free monthly amount cannot be carried over to other months if it is not used up.
- The tax exemption applies from the month following the month in which the standard retirement age is reached.
- The income remains subject to social security contributions: contributions to health and long-term care insurance must continue to be paid. Pension contributions can be made on a voluntary basis.
- Earnings above EUR 2,000 per month are subject to regular taxation.
- The active pension only applies to income from employment and only in an employment relationship. It does not apply to mini-jobs, self-employed persons, freelancers, farmers, foresters, or civil servants.
- The tax relief is granted in addition to the basic allowance and is not subject to the progression clause.
- If the employee has multiple employment relationships, the allowance may only be used in one employment relationship. In tax class VI, written confirmation from the employee is required that the tax exemption is not already being taken into account in another employment relationship.
- The active pension has no influence on the tax rate for other income. Old-age pensions that have already been paid out will continue to be taxed as before.
The double taxation agreement (DTA) between Germany and France regulates which country has the right to levy tax. In principle, tax is levied in the country of employment, with a credit in the country of residence. FRADECO ensures that both systems are correctly coordinated.
The company must register a French permanent establishment and pay income tax (“Prélèvement à la source”) and social security contributions to the French authorities. FRADECO takes care of all these obligations as part of its client services.
Special rules apply to intra-Community services: services provided to French companies are usually tax-exempt under the reverse charge procedure, while services provided to private individuals in France are subject to TVA. FRADECO prepares and submits the relevant VAT/TVA returns for both countries.
Before starting work, a declaration of posting (“Déclaration préalable de détachement”) must be submitted. A1 certificates are also required. FRADECO supports companies in completing all formalities in a legally compliant manner.
Cross-border workers generally pay their taxes in their country of residence, while social security contributions are paid in the country where they work. FRADECO prepares the statements in such a way that all tax and social security obligations are met.
Teleworking abroad can also have tax and social security implications. FRADECO checks whether a permanent establishment is created or adjustments to the payroll system are necessary.
After an initial consultation, we collect all relevant company data, review existing structures, and create a customized support concept for payroll, tax, and social security. The processes are then implemented.
We provide advice in German, French, and English. This ensures that all tax and administrative processes run smoothly in both countries.
All data is processed in accordance with GDPR regulations and stored on secure European servers. Sensitive information is transmitted exclusively in encrypted form via protected channels.
Social security & accident insurance
If someone was voluntarily insured in 2025 and their salary falls below the contribution assessment ceiling from 2026 onwards, the following applies:
Important: Voluntary insurance only remains in place as long as there is no obligation to take out insurance (e.g., due to falling below the annual income threshold). There is no grandfathering clause for voluntary insurance.
The following relevant adjustments to the company pension scheme will apply in 2026:
These adjustments affect both the tax treatment and the social security classification of occupational pension schemes in 2026, as well as the funding options available for them.
As a rule, the country of employment principle applies: social security contributions are paid where the work is actually performed. For activities in several countries, an A1 certificate can determine which national law applies. FRADECO will assist you with the application and implementation of these procedures.
Contributions are paid exclusively by the employer and paid directly to the relevant employers’ liability insurance association in Germany. For purely French employees working in France, the provisions of the “Assurance Accidents du Travail” apply. FRADECO coordinates the correct allocation of both systems.
As there are no individual employee contributions, payment for statutory accident insurance is made separately via the annual contribution notice from the employers’ liability insurance association. This regulation also applies to companies with cross-border payroll accounting.
You can find more information here: Information on accident insurance