Are you a remote employee considering digital nomadism? You may need to (eventually) tell your employer

If you are planning to travel around in different countries and staying for the short term in these countries, your activity will still fall under being more of a tourist visit.

However, if you are residing in a country long enough (like, 6 months) you might be considered a tax resident of that country and the payroll needs to affect that. That is, providing you even have the permit to reside long enough in the first place. So if you are planning to actually move longer term and you think you are staying there long enough to become a tax resident, then you’ll need to let the company about it in advance. Otherwise, you are taxed with your resident country since you are still considered a tax resident of your home country only.

The reason why is that payroll/accountants are required to look at different tax situations and ensure that the company’s obligations are being met.  Let’s say you are a mid-size remote company and you have 30 employees all living in 30 different tax jurisdictions.  Now that’s 30 different jurisdictions that payroll needs to look after. Doing international payroll is indeed a skillset that needs further training in ensuring that all these different tax obligations are being met.

Here’s an typical programme posted online for training payroll on how they can ensure that their company meets international tax obligations.

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Example Course Programme from IPASS:*

Taxation

• Residence and domicile – how these affect Irish taxation and payroll
• Operating Exclusion Orders
• Interaction with USC
• Double Taxation Agreements – how to use them within payroll

Social Insurance (PRSI)

• Work within the EU and EEA – Form A1
• Using Reciprocal Social Security Agreements
• Rest of the World – the 52 week rule
• Host Employer obligations

Administration

• Setting tax efficient expense packages for expats and impats
• Tax Equalisation Policies – how to design and run a scheme
• Calculation of hypothetical tax
• Posted Workers Directive – obligations within the EU and other EEA countries
• Global Mobility Policies
• Registering for payroll abroad – key steps to take in a new jurisdiction
• Software issues – a look at sourcing payroll and HR solutions abroad

Foreign Payroll for secondees

• Summary of key employer obligations in EU States
• Summary of key employer obligations in USA
• Summary of key employer obligations in other States

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Rather than handling the myriad of international payroll, some companies will instead do without employees and instead opt for freelancers or consultants working underneath their own privately held companies. In this case, it is up to the freelancer to handle their own tax obligations.