# Secondment

> A secondment is an arrangement in which an employee is temporarily assigned to work for a different organisation, often a client, subsidiary or partner, while staying employed by their original employer, which keeps responsibility for their payroll and HR.

A secondment is a temporary arrangement where an employee is assigned to work for another organisation, while their original employer stays in place as the legal employer. The employee might move to a client, a group company in another country, or a partner organisation, usually for a defined period before returning to their home role.

Throughout the secondment, the home employer normally continues to run payroll, deduct tax and meet HR obligations for the person. The host organisation directs the day-to-day work but does not become the employer. This is what separates a secondment from simply resigning and being hired by the other business.

Secondments are useful for sharing skills, supporting a project, or testing a new market, but they raise cross-border questions. When an employee is seconded into another country, tax authorities may examine whether the arrangement creates a taxable presence for the home employer, so the structure needs care.

## Who is the legal employer during a secondment?

The original, or home, employer usually remains the legal employer throughout a secondment. It keeps the employment contract, runs payroll and meets HR and tax obligations for the employee. The host organisation directs the work but does not take on employer status, which is the defining feature that separates a secondment from a permanent transfer.

## Why can a cross-border secondment create tax risk?

When someone is seconded into another country, that country's tax authorities may ask whether the home employer now has a taxable presence there, known as a permanent establishment. The level of control the home employer keeps over the seconded worker is often central to that question, so cross-border secondments need to be structured carefully.

Because the answer turns on the facts of each arrangement, it is worth taking tax advice before seconding someone across borders.

## When might an EOR be used instead of a secondment?

If you want someone to work in a country for the longer term, or you would rather not carry the tax presence risk of a secondment, an Employer of Record can employ the person locally instead. The EOR becomes the legal employer in that country, which can be cleaner than seconding an employee across borders.

## Key facts

- **Cross-border secondments can attract tax scrutiny:** In 2022 the Supreme Court of India (Northern Operating Systems) held that seconding overseas employees to an Indian group entity amounted to a taxable supply of manpower, a ruling that increased tax scrutiny of inbound secondment arrangements. (Source: IndiaCorpLaw (National Law School of India University), verified 2026-07-28)

## Secondment vs EOR

|  | Secondment | EOR |
| --- | --- | --- |
| Legal employer | The home employer stays in place | The EOR becomes the local employer |
| Typical duration | Temporary, then return to home role | Ongoing local employment |
| Main risk | Possible taxable presence for the home employer | Managed by the EOR as local employer |
| Best for | Sharing skills or short assignments | Longer-term hiring where you have no entity |

## Frequently asked questions

### Is a seconded employee still employed by their original company?

Yes. In a typical secondment, the employee stays on the payroll of their original, or home, employer, which remains the legal employer. The host organisation directs their work for the agreed period, but the employment relationship, including pay and HR responsibilities, continues with the home employer.

### How long can a secondment last?

There is no single fixed limit, and it depends on the arrangement and the countries involved. Secondments are meant to be temporary, often ranging from a few months to a couple of years. The longer and more cross-border the assignment, the more important it is to check the tax and legal implications for both employers.

### What is the difference between a secondment and an EOR?

In a secondment, the home employer keeps the employment relationship and lends the employee to another organisation. With an Employer of Record, a separate company becomes the legal employer in the country where the work happens. An EOR is often the cleaner option for longer-term hiring in a country where you have no entity.

## Sources

- [Secondment Taxation and the Northern Operating Systems Case](https://indiacorplaw.in/2022/10/19/secondment-taxation-and-the-northern-operating-systems-case/), IndiaCorpLaw

_Last updated 2026-07-28. Reviewed by Teamed's in-house employment-law team. Source: https://www.teamed.global/glossary/secondment_