The situation
Employees who live in one country and commute to work in another
A payroll lead at a German packaging group runs payroll for two sites: Aachen, with 40 staff commuting daily from the Netherlands and Belgium, and Braunau am Inn in Austria, with 25 commuting from Bavaria. Since a hybrid-work policy came in, staff spend up to two days a week at home. The tax office has asked one employee about his split.
Which country taxes the salary used to be settled per site. Home-office days unsettled it: each treaty treats days worked at home in the residence country in its own way, and some contain a frontier-worker rule with its own conditions. Each treaty has to be read again.
What the research has to settle
The rules behind the answer
- The default: tax where the work is done
- Under treaties that follow the OECD model, salary is taxable in the country where the work is physically performed. A day worked from home in the country of residence is generally taxable there, not in the employer’s country.
- Some treaties have a frontier-worker clause
- A frontier-worker clause gives the right to tax to the country of residence, usually where the worker lives and works near the border and returns home daily. The Germany–Austria treaty contains such a clause, with conditions on the border zone and on days away from it.
- Agreements can change the day count
- Some states have agreed special rules for home-office days of cross-border workers, by protocol or mutual agreement. Check whether one is in force for the treaty and year in question before splitting the salary.
- Non-residents may still claim allowances
- Germany and the Netherlands both give non-residents who earn almost all their income there access to allowances normally reserved for residents, under conditions. That affects the employee’s return, and sometimes the withholding.
How it runs in azta
From the question to the document
The question, as you would type it
Employee lives in Simbach am Inn, Germany, and works for an Austrian employer in Braunau. He commutes daily and works one day a week from home. Does the frontier-worker rule in the Germany–Austria treaty apply, and which country taxes the salary?
You start with
Employees who live in one country and commute to work in another
- 01
Describe the commute
Give the residence, the place of work, home-office days and any days elsewhere. azta searches the treaty and the national income tax rules of both countries.
Cited research· Free - 02
Read the treaty clause
Open the cited provision in the reader to check the conditions in the original language.
Atlas statute reader - 03
Draft the payroll note
Ask for a note per site: who qualifies, how days are split and what payroll keeps on file. Edit it in Canvas.
Canvas · Ask azta· Pro - 04
File it with the payroll records
Export to Word and keep it with the employee records, ready for the tax office’s questions.
Word export· Pro You send
A payroll note on which country taxes the salary under each treaty
What you get
A payroll note on which country taxes the salary under each treaty
Payroll note · draft
Cross-border commuters, Braunau site: where salary is taxed
Employees resident in Germany who live and work within the treaty’s border zone and return home daily are frontier workers under the Germany–Austria treaty. Their salary is taxable in Germany. Payroll keeps evidence on file that each employee meets the conditions, renewed each year.
Home-office days in Germany do not change this for frontier workers, since Germany taxes the full salary. Days on which an employee does not return home, or works outside the border zone, count towards the limit in the treaty and are recorded by the employee.
Employees who do not meet the conditions, for example because they live outside the border zone, are taxed under the general rule: Austria taxes the days worked in Austria, and Germany the days worked at home. Payroll applies the split from the recorded days.
Outcomes on your numbers
What azta is worth on this task
Pro pays for itself after
22 minutes a month
At €75 an hour, that is all the time Pro (€27 a month) has to take off your desk to cover its price.
Example figures. Replace them with your own.
- Hours back a year
- 32
- Capacity at your rate
- €2,430
- More commuter tax reviews a quarter
- 4.1
- Return on Pro
- 7.5×
- Research
- Drafting
- Your review
A scenario you set, not a promise. The hours that come back go to another client, or deeper into this one.
Want these numbers on your team’s real workload?
Book a demoSources azta searches here
- Gesetze im Internet
- RIS
- wetten.overheid.nl
- Justel
What stays with you
- The day records and the evidence each employee provides.
- Applying the result in the payroll system.
- Answering the tax office on each employee’s position.
Frequently asked questions
- Does azta hold the tax treaties?
- Ask about the treaty and azta cites the treaty provision together with the national rules. The source register lists what each country’s collection holds.
- Does this settle social security too?
- No. Social security follows the EU coordination regulations, which use different tests. Ask separately and azta researches them.
- Can azta split the salary for me?
- No. It establishes the rule for the split and cites it. The split itself is done in your payroll system from the recorded days.
