TN 18 (05-22)

RS 02002.015 Detached Worker Rule under the U.S. - Australian Agreement

A. Definition of a detached worker

A detached worker is an employee who is sent by his or her employer in one country to work temporarily in the other country for the same employer or an affiliate of that employer.

B. Detached worker rule

Under the Agreement, a detached worker remains subject only to the social security laws of the country from which the employer transferred the worker. However, the worker must meet all of the following conditions:

  • The employer and worker expect the period of employment in the host country to last no more than five years. The five-year period begins with the date the employment in the host country commences (or October 1, 2002, the effective date of the Agreement, if later);

  • The employment relationship existed before the employer transferred the worker from the home country;

  • If an American employer sends an employee to that employer’s affiliate in Australia, there must be an agreement in effect between the American employer and the Internal Revenue Service under section 3121(l) of the Internal Revenue Code to provide Social Security coverage for U.S. nationals and lawful permanent residents (green card holders) employed by the affiliate. In such cases, the employer must still obtain a certificate of coverage to establish the exemption from Australian social security taxes.

  • If an Australian employer sends an employee to become an employee of a related company in the United States, the related company must be a member of the same wholly or majority owned group as the Australian employer under the applicable provisions of Australian law.

    NOTE: Under the provisions of the Agreement, the detached worker rule may apply even if the employer does not send the employee directly from one country to the other, but first assigns him or her to work in a third country.

C. Information on Australian tax laws

Refer inquirers who want information about related companies under Australian law to the Australian Taxation Office web site at

D. References

  • RS 01901.070 Agreement under Section 3121(l) of the Internal Revenue Code

  • RS 01901.050 Employment Outside The United States for An American Employer

  • RS 02002.045 Certificates of Coverage and Letters of Exemption under the U.S.-Australian Agreement

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RS 02002.015 - Detached Worker Rule under the U.S. - Australian Agreement - 05/09/2022
Batch run: 05/09/2022