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Book a call ↗Social security contributions are mandatory payments calculated on wages that fund public pensions, health care, unemployment benefits and other social insurance. In most European countries they are split between an employer share, paid on top of the salary, and an employee share, deducted from it. The employer usually withholds both and pays them over.
For a US company hiring in Europe, they are the biggest reason an employee costs more than the salary on the offer letter. The employer share alone ranges from 15% above a threshold in the UK to 33% in Estonia, and the rules on which country gets paid are set at EU level.
Which country gets paid
EU coordination rules, set by Regulation (EC) 883/2004, make sure a person is covered by one country's system at a time (EUR-Lex summary). The default is the country where the person actually works, regardless of where they live or where the employer is based (European Commission). Two exceptions matter for remote teams:
- Posting. A worker sent abroad temporarily can stay in the home system for up to 24 months, documented with a Portable Document A1 (Your Europe).
- Work in several countries. The country of residence applies if at least 25% of the activity happens there; otherwise usually the country of the employer's registered office.
An employer hiring staff in another EU country must register there as an employer and withhold and pay both the employer and employee shares (Your Europe). A self-employed contractor registers and pays their own contributions in the country where they work (Your Europe). The UK left EU coordination on 1 January 2021.
2026 rates in six hiring markets
| Country | Employer pays | Employee pays | Source |
|---|---|---|---|
| Estonia | Social tax 33% plus unemployment insurance 0.8% | Unemployment insurance 1.6%, funded pension 2% by default | Estonian Tax and Customs Board |
| Germany | Pension 9.3%, unemployment 1.3%, health 7.3% plus half the fund's add-on, long-term care 1.8% | The same shares, plus a 0.6 point care surcharge if childless | DRV, Health Ministry, care insurance |
| Spain | Common contingencies 23.60%, unemployment 5.50%, FOGASA 0.20%, training 0.60% | 4.70%, 1.55% and 0.10% | Seguridad Social |
| United Kingdom | 15% above £5,000 a year | 8% between £12,570 and £50,270, then 2% | HMRC |
| Portugal | 23.75% | 11% | PwC Portugal (secondary) |
| Poland | 19.48% to 22.14%, depending on the accident rate | 13.71% for pension, disability and sickness, plus 9% health | PwC (secondary) |
Spain's employee and employer unemployment rates shown are for permanent contracts. Germany caps pension contributions at €8,450 of monthly salary in 2026, and Spain caps its contribution base at €5,101.20 a month. The Polish and Portuguese rates come from PwC because the official pages could not be read; check them with a local adviser.
What it means when you hire in Europe
Budget for the employer share before you make an offer. It is the largest part of the fully loaded cost of a European employee, and it changes the comparison between employing someone through an Employer of Record and paying an independent contractor, who covers their own. If you use contractors, keep the relationship genuinely independent: misclassification can lead to back contributions. The US vs Europe salary calculator shows the employer cost by country, and the country guides for Germany, Spain and Poland go deeper.
This is general information, not legal or tax advice. Rules differ by country and change, so confirm your case with a local lawyer or accountant.
Euro Remote Talent runs searches across Europe for a flat $6,500, with a shortlist of three vetted candidates in 21 days and a 12-month replacement guarantee, through Hiring Done For You. If you would rather run the search yourself, a job post is $299, live for 60 days, and the fee is credited in full if you later move to the done-for-you service.
