What is a Secondment? The Full HR Compliance Guide for 2026

This is what employers and staff need to understand about secondment and internal transfers, from writing compliant agreements to avoiding extra tax obligations

27 March 2026 | Alex Schulte

A business’s greatest asset is the combined skill set of its people. But as organisations grow and develop new departments, employees’ knowledge of the business needs to grow too. Experience is the best teacher, which is why companies often transfer staff throughout – and sometimes beyond – their organisation for temporary periods to work. This is known as a secondment.

Whether you’re an employer looking to redeploy a staff member or an employee who is being moved to another business unit, this guide should give you everything you need to know about the ins and outs of secondment.

So let’s jump in.

What is a Secondment?

A secondment is an umbrella term for a temporary arrangement in which an employee is assigned a different job role for a temporary period. This is typically within a different part of an organisation, meaning the employee remains employed by their original employer. This is also known as an intra-company transfer. However, it may sometimes involve reassignment to a different company, something known as an external secondment.

Unlike a permanent job change, secondments are temporary in nature, typically lasting from a few months to two years.

The hope is that employees will return with new skills gleaned from peers in different departments and a refreshed sense of how their organisation works.

Anatomy of a Secondment

A secondment has a few distinguishing features:

• Temporary duration: Unlike permanent transfers, secondments have a defined timeframe.
• Continued employment: The secondee typically (but not always) remains employed by their original organisation.
• Formal agreement: A secondment is formalised through a written agreement between all parties.
• Skills development focus: The primary purpose is typically professional development and knowledge exchange within or between organisations.
• Mutual benefit: Successful secondments give employees new skills and deliver value for both their original organisation and the host organisation.

Different Types of Secondment

Secondments can come in different forms to suit different organisations’ various needs.

Internal Secondments

Internal secondments involve an employee moving to a different department, team, or branch within the same organisation. These arrangements help large organisations to:

• Break down silos between departments
• Provide employees with broader organisational knowledge
• Develop future leaders with cross-functional experience
• Fill temporary skill gaps within specific teams

For a quick example, let’s imagine an HR manager at a university who is temporarily assigned to work in the Admissions Department, in order to contribute their expertise in process optimisation to improve student onboarding processes. They would remain technically employed by the HR department, but report to the Admissions team leader each day.

After completing the secondment, the manager returns to their original role with a better understanding of student needs. The Admissions team can now use the skills they’ve picked up to improve their onboarding processes in years to come.

External Secondments

In an external secondment, an employee will temporarily work for a different organisation. These arrangements are often established between:

• Partner organisations with collaborative relationships
• Suppliers and their clients
• Professional service firms and their clients
• Organisations with complementary skills or knowledge needs

Let’s make this clearer with an example.

A prestigious London law firm represents a fast-scaling tech startup looking to ensure it can monetise its innovative products and avoid any infringements. A senior associate specialising in intellectual property law at the firm is seconded to the client for six months to provide guidance on its patent applications.

During the secondment, the lawyer works directly with the startup’s founders and in-house legal team, providing daily counsel on IP strategy, drafting patent applications, and negotiating licensing agreements. This arrangement allows the startup to access legal expertise without the cost of a permanent hire, while the law firm deepens its relationship with a promising client. The seconded lawyer gains invaluable insight into the tech industry and how startups work. This will improve the legal advice they can give to clients in this sector in the future. Everybody wins.

International Secondments

In a globalised world, secondments don’t just happen within national economies. Multinational companies regularly transfer staff to branch offices for knowledge transfers, while international partner ecosystems require flows of people.

International secondments are the most challenging from a tax, legal and compliance perspective, but can have the greatest mutual benefits.

Employees get the chance to sample life in a new country, while in-house expertise can make market entry strategies and new product or service launches run much smoother.

Imagine a UK software development firm with clients across the Middle East. They might partner with a UAE-based consultancy to build out a smart mobility project in Dubai. The UAE partner requests that the UK firm second a senior data engineer to their local team for a year.

This comes with its own burdens. The UK company will have to arrange a Dubai work permit and visa for their employee and review tax arrangements. The secondee’s original employee contract will need to remain in place while they work for another organisation, adding another layer of complexity.

But these details are secondary to the value secondment will bring to all parties. The UK company will gain a better insight into market dynamics in a key target region. The UAE consultancy will absorb new technical skills straight from the source, while the seconded employee will get hands-on experience in another country (and a whole lot of sun).

Secondments are clearly a strategic tool for businesses to develop key skills internally. And like any other business strategy, they come with legal requirements that all parties must adhere to.

All types of secondment present legal complexities and ambiguities. But as you might expect, these are magnified as assignments cut across employers and national borders.

Let’s take a look at the different legal dimensions of managing secondments, whether internal, external, domestic or international.

Who is the Legal Employer in a Secondment?

This is the most fundamental question in any secondment.

In most secondment arrangements, this is relatively clear-cut:

• The home employer (the original company) retains the employment contract and legal responsibility for the secondee.
• The host organisation (subsidiary, client, or partner) supervises the employee on a day-to-day basis.

This distinction must be clearly documented to avoid legal confusion, especially in countries where host liability or co-employment rules could be triggered.

Cross-Border Employment Law in Secondments

The applicable law in a secondment is often more complex than employers assume. This is compounded several times over in international scenarios.

In many cases, local labour law in the host country may override contractual terms, even when the employment contract is governed by the law of the home country.

• In the EU, the Posted Workers Directive requires that seconded workers adhere to local minimum employment standards.
• In Saudi Arabia and other Middle Eastern countries, workers may still require local employment contracts to obtain work permits, even if not on local payroll.
• In the US, the host entity may be viewed as a joint employer under federal or state law, triggering potential liabilities if an issue arises.

These ambiguities mean Global Mobility teams need to read up very closely on the legal particulars of the secondment destinations. Companies that play fast and loose with employment law will seriously imperil their ability to continue operating in target markets.

Immigration and Visa Compliance Obligations for Secondments

Secondments across borders almost always trigger visa or work permit requirements. Even where the employment contract remains with the home employer, the host country may legally require:

• A sponsored work permit
• Labour market testing (e.g. in the UK or Australia)
• Local registration or residency requirements
• A posted worker notification

Key Immigration Questions to Ask Before a Secondment

Before arranging any global secondments, ask yourself the following questions to make sure you’re on solid ground.

• Will the employee carry out work that benefits the host entity?
• Is the secondment longer than a few weeks?
• Will the employee be based in-country for an extended period or on a rotating basis?
• Does the secondee need to access client sites, sign contracts, or manage local teams?

If the answer is yes to any of these, a work permit or visa is likely required.

Common Visa Types Used for Secondments

Typically, a seconded employee will need the following documents to secure any of these visas:

• Valid passport
• Secondment agreement
• Letter from the host company
• Proof of employment with the home entity
• Educational/professional qualifications
• Criminal record check (sometimes)
• Proof of accommodation and/or health insurance

Common Compliance Pitfalls

Companies undertaking secondments commit a few cardinal sins over and over again.

• Misusing short-term visas or visa waivers for actual work
• Late visa filings, causing project delays
• Overlooking local registration requirements (e.g. address registration, tax ID)

There is no room for business travel compliance slip-ups in international secondments. In Austria, for example, any failure to notify authorities of a seconded worker’s status can lead to fines of up to €10,000 per worker. This isn’t to mention the operational costs of secondees finding themselves unable to enter the countries they’re scheduled to work in, or being deported.

Centuro Global’s Travel Compliance Assistant can give you all the information you need to arrange any secondment, anywhere on earth.

Payroll, Tax & Social Security in International Secondments

Global Mobility and HR teams arranging international secondments need more than just a keen understanding of visa and immigration regulations. They also need to know how the employee must be paid and taxed in their new location.

An insufficient understanding of home and host country payroll can grow your company’s tax bill unnecessarily and even expose you and your employees to criminal liability.

Who Pays the Employee?

This is another fundamental question of any secondment: who pays the salary? In most secondments, the home employer continues to pay the employee via domestic payroll.

The host entity may reimburse the home employer or contribute to costs (e.g. housing, per diem, relocation).

If the second employee is paid directly by the host, this may constitute a new employment relationship in that jurisdiction, which comes with its own tax, social security, and employment law obligations. To avoid these tax burdens, employers organising secondment jobs use mechanisms like shadow payrolls.

Shadow Payrolls: What and Why?

A shadow payroll is a mechanism used during international secondments where an employee continues to be paid in their home country, but a “shadow” version of their payroll is run in the host country to comply with local tax and social security obligations.

It allows local authorities to track:

• Notional salary
• Tax withholdings
• Social security contributions
• Employee presence in-country

For example, A UK employee seconded to Germany may continue receiving their UK salary but will appear on a German shadow payroll to comply with local tax laws.

Tax Residency & Double Taxation

Even with a shadow payroll in place, an employee may become a tax resident in the host country if their stay exceeds certain thresholds (often 183 days in a calendar year). This will mean that they will have to pay both domestic and host country taxes.

National authorities are acutely aware that this could disincentivise cross-border investment and collaboration, which is why many have signed Double Taxation Treaties (DTTs). These agreements largely eliminate the risk of double taxation in international assignments that involve the signatory countries.

But tax treaties don’t entirely remove the risks of double taxation if:

• The home country taxes worldwide income based on residency or citizenship (e.g., the US).
• The host country also taxes the same income.
• Relief isn’t claimed properly under a Double Taxation Agreement (DTA), or tax credits are denied due to poor documentation or timing.

To ensure that employees on secondment aren’t taxed to the hilt, companies should:

• Review Double Taxation Treaties (DTTs) between countries
• Consider tax equalisation or tax protection policies
• Conduct individual tax assessments before departure

Social Security Contributions

Social security contributions are often overlooked in secondments or confused with income tax. This is a big mistake.

The rules around contributions can vary between countries, and getting it wrong can have disastrous consequences for employers and employees alike.

When an employee is seconded internationally, two sets of social security systems may claim contributions:

• The home country (where the employment contract remains)
• The host country (where the employee is physically working)

Unless properly exempted, the employee and employer may need to pay into both systems.

Bilateralism

Many countries have bilateral agreements (also called totalisation agreements) to prevent this.

These agreements usually:

• Allow the secondee to remain enrolled in the home country scheme for a fixed period (e.g. up to 24 months)
• Require an official certificate to prove exemption from host contributions

If a secondment takes place within the EU/EEA or a country with a bilateral agreement, the employee will benefit from this coverage, as long as they submit documents such as:

• A1 certificate (EU secondments)
• Certificate of Coverage (US totalisation agreements)

If no such agreement exists, employers may be required to contribute to both home and host country schemes, increasing costs.

Risk of Permanent Establishment (PE)

If a seconded employee is performing core revenue-generating or contract-signing functions in a foreign country, tax authorities may view this as creating a Permanent Establishment for the home company. In a nutshell, this means the host country’s authorities judge that your activities in that country are substantial enough to be taxable.

This will not typically impact international internal secondments, as the presence of a branch office will already have triggered a Permanent Establishment. But it’s something that employers must bear in mind when arranging external assignments in countries where they have no prior base.

But employee development doesn’t have to come at the price of corporate tax obligations. To reduce this risk, companies should:

• Carefully draft job descriptions
• Avoid giving secondees power of attorney or signing authority
• Review duration thresholds and treaty protections

Why Every Party Needs a Secondment Agreement

To stave off all of these legal risks, it is vital that all parties align in writing on a secondment agreement before any work begins. This is a formal arrangement that specifies the terms on which the secondment will take place.

Key Parts of a Secondment Agreement

At the very minimum, any secondment agreement for an external secondment should cover:

• ✅ Start and end dates of the secondment
• ✅ Location and any applicable travel or relocation support
• ✅ Roles and responsibilities under the host entity
• ✅ Who pays the salary and how reimbursement works (if applicable)
• ✅ Benefits and entitlements, including bonuses, leave, insurance, etc.
• ✅ Supervision and reporting: Who does the secondee report to?
• ✅ Return clause: Whether the employee will return to their original role
• ✅ Appraisals or disciplinary matters: Which ****organisation is responsible for assessing or disciplining the employee?
• ✅ Procedures for extension or curtailment: The protocols by which the secondment might be extended or cut short
• ✅ Termination: What happens if the secondment ends early
• ✅ Confidentiality, IP, and non-compete clauses
• ✅ Compliance with immigration and tax obligations

💡 Tip: Where the host is in a different country, a tripartite agreement (home employer, host, employee) is usually required, and may need review by local counsel.

Clear and unambiguous alignment on all these points will give each party confidence in their responsibilities and remove the risk of legal disputes.

How HR Leaders Can Build a Global Secondment Policy

A secondment agreement is a must in every single scenario. But HR teams need more than circumstantial arrangements. They need a clear, consistent, and compliant secondment policy that protects the business, supports employees, and ensures regulatory compliance anywhere on earth.

A well-structured secondment policy provides the foundation for scalable, repeatable, and legally sound secondments, whether you’re moving employees between offices in London and Berlin or seconding a specialist from Riyadh to Toronto.

The particulars of each secondment will naturally differ from case to case. But without a central hymn sheet, different units in large organisations may well turn to ad hoc, informal arrangements that can spell a world of trouble.

Imagine your policy as a template from which you can flesh out each of your bespoke secondment agreements.

What Your Secondment Policy Should Include

1. Purpose and Scope:

• Purpose: Clearly state the reasons or circumstances under which you will offer or accept secondments, such as skill development, knowledge sharing, partner opportunities or addressing temporary staffing needs.
• Scope:Define which employees and/or departments are covered by the policy, and whether it applies to internal or external secondments

2. Eligibility Criteria

• Define the minimum length of service: How long should an employee have worked for you before they are eligible for a secondment?
• Define the performance thresholds that will spell eligibility for secondments
• Define approval: Who signs off on the secondment? HR, legal, finance, or all three?

3. Secondment Duration

• Minimum and maximum duration: How long should employees expect secondments to last?
• Options for extension or early termination: What are the provisions for circumstances in which the minimum or maximum duration may have to change?

4. Contractual Framework

• Use of secondment agreements (tripartite or bipartite): How will you approach the legal formalities of your secondments
• Home contracts: What happens to the employee’s contractual status during the secondment?

5. Pay

• Payment of salary: Who will pay the seconded employee’s salary? How are bonuses, pension and healthcare factored into this?
• Reimbursement: How are they reimbursed for expenses like housing, travel and schooling?
• Training costs: Who is responsible for footing the bill for any training required during the secondment

6. Leave and Absence:

• Annual Leave: How will annual leave requests be handled during the secondment, including who approves them and how leave is recorded?
• Sick Leave: What are the procedures for dealing with sickness during the secondment, including who is responsible for providing sick pay?

7. Performance Management and Supervision

• Who will supervise seconded employees: Will they be remotely supervised by the home company or by the host entity?
• How will their performance be assessed: Will they be evaluated according to the host organisation’s metrics or by their original employer’s?

8. Immigration & Visa Management

• Visa sponsorship: Who is the sponsor – the host entity or the original employer?
• Compliance oversight: Which party is responsible for continuous compliance?

9. Return and repatriation

• Re-entry planning: What are the protocols for ensuring the secondee’s smooth transition back to the original place of employment
• Career progression: How will seconded employees progress in their roles after the secondment has finished?

You may also wish to spell out protocols for other considerations like taxation, confidentiality, restrictive covenants and notice requirements.

Adapting the Policy to Local Requirements

While a global policy ensures consistency, it must be flexible enough to account for local law and practice. For example:

• In Germany, secondees may be entitled to local co-determination rights
• In Saudi Arabia, a secondment without a valid iqama (residency) can lead to heavy penalties
• In Japan, the employer remains liable for welfare contributions even during outbound secondments

You may need local addenda or jurisdiction-specific guidance notes, which is something Centuro Global’s AI-enabled compliance tools can help you put into practice.

Crafting a Compliant Secondment Strategy with Centuro Global

A secondment is a multi-disciplinary undertaking that requires expertise in immigration, tax, payroll, and employment law in multiple jurisdictions. Many companies don’t have the capacity to juggle all these demands and run into unnecessary compliance trouble in the process. If that sounds familiar, then Centuro Global is here to help.

We combine decades of cross-border legal experience with an AI-driven knowledge engine to help businesses get their global workforces on the move. From visa processing and secondment agreement drafting to shadow payroll setup, tax risk assessments, and global policy design, we will help you ensure every secondment is legally sound, cost-effective, and employee-friendly.

Whether you’re seconding talent to Saudi Arabia, the US, or across the EU, our experts will support you. Get in touch to find out more.

Frequently Asked Questions About Secondments

🔄 What is a secondment?

A secondment is a temporary work arrangement where an employee is assigned to a different role, department, office, or organisation — either domestically or internationally — while remaining employed by their original employer. Secondments are commonly used to support international projects, talent development, or inter-company collaborations.

🌍 What is an international secondment?

An international secondment occurs when an employee is sent to work in a different country on a temporary basis, usually within the same corporate group or as part of a client service arrangement. Immigration, tax, and social security compliance are critical in international secondments.

📜 Do I need a secondment agreement?

Yes, a secondment agreement is essential to clarify the responsibilities of the home employer, host organisation, and employee. It should cover the duration, location, duties, reporting lines, salary arrangements, immigration obligations, and return conditions.

🛂 Do secondments require a visa or work permit?

In most international secondments, yes. Even if the employment contract stays with the home employer, the host country usually requires a valid visa or work permit if the secondee will be performing productive work. Visas designed for short-term travel are rarely sufficient.

💼 Who pays the salary during a secondment?

Typically, the home employer continues to pay the salary, while the host organisation may reimburse some or all of the cost. However, in some cases, local payroll or a shadow payroll may be required for tax or social security compliance.

📅 How long can a secondment last?

Secondments can range from a few weeks to several years, depending on the business need and legal allowances in the host country. Many companies limit secondments to 6–24 months to avoid tax residency or Permanent Establishment (PE) risks.

🔁 Can a secondment become permanent?

Yes, a secondment can become permanent — but it must be managed carefully. If both the employer and employee agree to a long-term or indefinite transfer, the terms of employment may need to be formally updated. A secondment turning permanent may trigger:

• A new employment contract in the host country
• Local payroll and tax registration
• Changes to visa or sponsorship status
• Termination of the original employment relationship in the home country

It’s important to review immigration, legal, and tax implications before making the arrangement permanent.

🧾 What are the tax risks of a secondment?

Tax risks include:

• The employee becoming tax resident in the host country
• Double taxation if no treaty applies
• The employer creating a taxable presence (Permanent Establishment)
• Withholding errors due to payroll in the wrong country

Global tax planning is essential before a secondment begins.

🛑 What are the compliance risks of secondments?

Common compliance risks include:

• Immigration violations (e.g. working without a permit)
• Misclassification of employment
• Failure to register with local authorities
• Data protection breaches
• Breach of local labor laws or collective agreements

A secondment agreement and local legal advice can reduce these risks.

📋 What should be included in a secondment policy?

A secondment policy should define:

• Eligibility criteria
• Duration limits
• Responsibilities of each party
• Immigration and tax compliance process
• Compensation structure
• Repatriation and return-to-role terms