Cross-border remote work: the 2026 compliance guide

Since 1 January 2026, the legal framework for telework for cross-border workers has become significantly stricter, especially for employees residing in France and working in Switzerland. Concretely, new tax amendments are coming into force, and the application of European law in the area of social security is being strengthened. 

These developments turn cross-border workers’ telework into a major compliance issue for HR departments and executives of Swiss companies. Indeed, with automated checks, exceeding the prescribed thresholds exposes you to costly consequences. So, what rules must be followed regarding telework for cross-border employees to avoid a tax risk or a social-security shift?

This guide aims to provide an operational reading of the rules applicable in 2026, the thresholds to watch, and the consequences for the Swiss employer in the event of an overrun. In addition, we offer concrete solutions to structure these practices and make telework monitoring part of a talent management strategy.

Taxation and social insurance: the two pillars of risk for cross-border telework

Since the explosion of telework linked to the Covid-19 crisis, the telework setup for cross-border workers raises questions. If an employee in Switzerland teleworks from home in France, should their work be taxed in France? And from what volume of telework do they fall under French social insurance?

It is to clarify this that the legal framework has recently evolved, by setting clear thresholds beyond which the cross-border employee must pay taxes and move to the social security regime of their country of residence. However, it is essential to distinguish the social aspect and the tax aspect for this issue. 

Why taxation and social insurance must be treated separately

A common mistake made by Swiss employers is to treat cross-border telework as a single issue. In reality, it is based on 2 legal frameworks that are completely distinct and independent :

• The tax aspect, linked to the place where the cross-border worker’s salary is taxed;

• The social aspect, relating to social insurance, which determines which regime the employee is affiliated with and to whom the Swiss employer must pay contributions.

These 2 pillars are governed by different texts, involve distinct thresholds and are dealt with by separate authorities. An employer can very well be below the tax telework threshold but exceed the social threshold. 

Why an error on just one pillar is enough to create a major risk

European authorities have announced a tightening of controls related to cross-border telework from 2027. Concretely, European states will put in place automatic data exchanges to better identify cross-border telework situations.

For Swiss companies, particularly concerned by the use of cross-border employees, this implies significant financial and administrative risks. Indeed, an unforeseen overrun of social and tax thresholds can lead to :

• A social contribution reassessment, often retroactive;

• Increased complexity in withholding tax;

• Reduced visibility over employer costs, sometimes across several fiscal years.

For a mid-sized Swiss company, an error involving just one cross-border employee can represent several tens of thousands of francs, not counting the administrative burden and the risk of later audits.

The social pillar: the 25% threshold never to lose sight of

The basic European rule on social insurance for cross-border telework

The social aspect is governed by the EU Regulation 883/2004, applicable to Switzerland under its agreements with the European Union.

Here is the fundamental principle : if an employee performs more than 25 % of their working time in their country of residence, they move into that country’s social security system.

This threshold applies to all social contributions :

• Retirement;

• Health insurance;

• Unemployment insurance;

• Associated social benefits

The regulated tolerance via the A1 form (up to 49.9%)

Since the multilateral framework agreement based on Article 16 of Regulation EU 883/2004, a regulated derogation is possible.

A cross-border employee can remain affiliated with Swiss AVS until 49.9 % telework, provided that :

• The employer makes a formal request for an A1 form;

• Tracking is strictly documented.

France, Germany, Italy, Austria and Switzerland are signatories to this agreement.

What actually goes into the social threshold calculation

Here is the formula for calculating the percentage of telework for a cross-border employee :  

(Days worked outside Switzerland ÷ total actual working days) × 100

You must include :

• Days on assignment or training outside Switzerland;

• Part-time or compressed-week arrangements.

The tax pillar: telework rules according to the country of residence

If the social threshold is uniformly imposed on Switzerland and all its neighboring countries, the tax threshold varies from one country to another.

Tax principles applicable to cross-border telework

On the tax side, telework is governed by bilateral agreements between Switzerland and neighboring countries. In principle, salary is taxed where the activity is carried out. This means that if you work from France or Germany, it is subject to those countries’ income tax.

However, telework directly calls this principle into question. Indeed, where should an employee who teleworks for a Swiss company from another country be taxed? That is why there are telework tolerance thresholds that vary by country.

Cross-border telework: 2026 comparative table of tax thresholds by country

France-Switzerland: the tax framework for telework in 2026

Since 1 January 2026, the amendment to the 1966 Franco-Swiss tax treaty authorizes up to 40 % telework from France while remaining taxed at source in Switzerland.

Beyond that :

• Excess days become taxable in France;

• The employer must adjust withholding tax: it is no longer calculated on the entire salary, but prorated according to the days worked in Switzerland and the days taxable in France. This entails additional administrative burden;

• Traceability becomes mandatory: the employer must be able to prove the exact number of teleworked days, their location, and the calculation of the annual percentage.

Italy-Switzerland: the tax framework applicable to telework

For Swiss employees residing and teleworking in Italy, the tax threshold remains at 25 % of working time. Beyond that, teleworked days are therefore taxed in Italy. 

Reference legal texts :

• Double tax treaty Switzerland–Italy

• Official statements from the Swiss Chancellery

Germany and Austria: no dedicated telework framework

For Germany and Austria, each working day is taxed locally. No text provides a tolerance specifically for telework.

Reference legal texts :

• Tax treaty Switzerland–Germany (1971)

• Tax treaty Switzerland–Austria (1974)

Exceeding the thresholds: what are the consequences for the company?

It may happen that an employee exceeds the telework thresholds, which leads to administrative and financial consequences for the employer and for the employee concerned.

Social reassessments and change of regime

Exceeding the social threshold in cross-border telework (25 % or 49.9 % with the A1 form) leads to:

• An affiliation of the employee to the social security system of the country of residence;

• Contributions often higher than AVS;

• Retroactive regularizations, interest and penalties.

Tax complexity and organizational risks

On the tax side, exceeding the prescribed threshold exposes the company to :

• Double taxation;

• Subsequent payroll corrections;

• Audits and controls reinforced.

From 2027, automatic data exchange will make these situations much easier to detect.

Securing cross-border telework with a suitable HRIS

Faced with this complexity, the right HR tools can greatly facilitate the monitoring of cross-border telework. An HRIS designed for the Swiss context helps secure compliance with thresholds through :

• A rules and alerts engine to track working time by location and prevent threshold breaches;

• A single source of truth, with the centralization of telework amendments and A1 forms in the digital employee file;

• Native payroll connectivity, ensuring consistent withholding tax calculations via Abacus or ProConcept.

Roger natively integrates local specifics that many foreign software packages handle poorly, making it a key compliance lever for Swiss companies. In addition, our tools integrate many modules such as the satisfaction survey.

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