Workation

A workation is working your normal job from a holiday destination — usually another country — rather than taking time off. The employee works their contracted hours; only the location changes.

It’s the most-requested flexibility of the remote era and the one carrying the most legal exposure, because a workation is work, not leave — and nearly everything risky about it follows from that.

It isn’t leave, which is the tracking problem

Vacation gets booked. Sick days get reported. A workation often gets recorded as nothing at all — the employee is working, so there’s nothing to deduct and no request to approve.

That’s the problem. Every compliance risk below turns on where someone is and for how long, and an organisation that doesn’t record workations can’t answer either question. The employer carries the liability; the employee holds the only copy of the facts.

The first fix isn’t a restriction, it’s a record: a leave type that deducts nothing but captures country and dates.

The tax rules people get wrong

The 183-day rule doesn’t say what people think. Under Article 15 of the OECD Model Tax Convention, employment income is exempt in the country where the work is performed only if three conditions are all met: the employee is present for fewer than 183 days, and the employer isn’t resident there, and the remuneration isn’t borne by a permanent establishment the employer has there. Most people remember only the first. Fail either of the other conditions and the host country can tax from day one.

The OECD has no day threshold for a permanent establishment. A PE is a “fixed place of business through which the business of an enterprise is wholly or partly carried on,” and an employee working regularly from abroad can create one — particularly where the employer knows and allows it, or where the employee habitually concludes contracts. National safe harbours vary widely, roughly 24 to 183 days; France generally accepts short-term telework under about 60 working days, while Germany has no formal safe harbour and assesses case by case.

So an internal cap of 30 or 60 days a year is a sensible risk choice, not a legal safe harbour — it’s staying well inside the uncertainty, not protection from it.

And a tourist visa is not a work permit. Digital nomad visas now exist in dozens of countries, but most are built for the self-employed or for remote employees of foreign companies, with income thresholds attached.

What the EU has solved

Social security is the one area with a genuine mechanism. Under the Framework Agreement on cross-border telework, in force since 1 July 2023, an employee living in one signatory state and working for an employer registered in another can stay in the employer’s social security system — provided telework in their state of residence is under 50% of total working time and both parties consent.

23 states have signed, including Germany, France, Spain, Italy, the Netherlands, Switzerland and Norway, with Estonia joining in February 2026. The UK has said it will not.

Note the limits: social security only, not income tax and not permanent establishment. The rest stays a country-by-country question.

Writing a workation policy

• Require approval in advance, with country and dates — the record is the point
• Cap days per country per year, commonly 30 to 60 working days, and track against it
• Exclude roles that carry PE risk — anyone negotiating or signing contracts, or making management decisions
• Keep a list of permitted countries rather than reviewing each request from scratch
• Make the employee confirm their right to work there, and say plainly that a tourist visa usually isn’t one
• Decide who bears any cost — additional tax, insurance gaps, equipment
• Record it as its own leave type with zero deduction, so it shows on the team calendar without touching anyone’s balance

This entry is general information, not legal or tax advice. Tax, social security and immigration rules vary by country and by treaty — take advice before approving work from abroad.