The world of work keeps shifting, and for many businesses, flexibility is now a key part of the offer. One growing trend? The “workcation” — where employees spend part of the year working remotely from another country.

What began as an occasional perk has become a structured option in many organisations. According to a recent survey, 77% of mid-sized employers now have a formal international remote-working policy, up from 59% just two years ago. It’s a reflection of how hybrid working has matured — and how businesses are using flexibility to attract and retain talent.

Setting boundaries

Despite the rise in popularity, these policies are far from open-ended. Almost every company that allows overseas work (99%) does so only within strict parameters — and that figure has risen sharply from 92% in 2023.

Typical boundaries include:

• Limits on the number of days abroad
• A list of approved countries
• Pre-travel declarations and HR approval
• Clear tax and social security guidance

These checks ensure the arrangement stays low-risk for both sides.

Compliance comes first

Just a few years ago, letting an employee work from another country could quietly trigger tax filings, local payroll requirements or even a “permanent establishment” issue. In 2025, that risk is much lower — but only because employers are taking compliance seriously.

The latest data shows that the number of firms rating overseas work as a high compliance risk has dropped to just 2%.

That’s thanks to:

• Better monitoring systems
• Integrated payroll and HR data
• Clearer cross-border tax advice
• Stronger employee training before travel

Why this matters

Workcations can be a powerful retention tool. For employees, they offer a sense of balance and freedom. For employers, they can mean happier, more loyal staff.

But flexibility only works if the framework is solid.

If you’re considering allowing staff to work abroad — or refreshing an existing policy — make sure you:

• Document your rules and approval process
• Map out where and when tax or social security obligations arise
• Build in checks for local employment and immigration rules

Handled well, workcations can deliver flexibility without creating compliance headaches — a win for both sides.

📞 Talk to us about your business if you’d like to review your current processes or get practical guidance on managing the risks.