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Workation – work while you are on holiday!

Workation – work while you are on holiday!

Workation – work while you are on holiday!


With the rise of remote working, the idea of workation (work+vacation) is becoming more and more popular among employees, which provides the opportunity to get to know more about a country by combining vacation and work.  For example, a one-month stay in Spain might even include a language course, a beach holiday, learning flamenco and in-depth enjoyment of Castilian guitar music, in addition to diligent and effective work. Therefore, more and more employees approach their employers with such a request, and employers can also implement it as a means of increasing employee satisfaction.

However, in addition to the HR aspects, it is also worth paying attention to the labour law, tax and social security aspects before introducing workation.

What is workation about?

Workation generally can also be described as teleworking from abroad, and is certainly another milestone in the trend of gradually dissolving the sharp boundaries between work and private life.

Who hasn't dreamed of moving to a warmer country during winter? Or spending several months in a new place instead of a week or two on holiday. In a traditional employment relationship, there are not many opportunities to do this, as the number of days off is limited. Workation can be a good solution in these cases: the employee goes abroad for a limited period and works from there within the framework of remote working. A workation is not a posting, but can be an extension of a holiday abroad or a visit to a friend/relative living abroad, while still meeting the obligations of the employment relationship.

What does the employer need to consider in advance? Can the employer or the employee be disadvantaged?

The introduction of such a measure requires a thorough investigation from the company's side. The following questions should be considered and discussed with a labour lawyer and a tax advisor before drawing up an internal regulation:

  • Which countries allow this form of work? Different countries (e.g. EU, non-EU) may apply different tax regimes regarding workation.
  • How is it possible to avoid tax and social security risk?
  • What time limit should be defined for the workation?
  • How is the working time determined by the parties?
  • How is it possible to comply with the respective health and safety rules?

In the territory of the European Union, citizens of the member states can work in any member state without a work permit following the principle of free movement, however, in the case of more exotic countries (e.g.: South America, Bali, various islands), the conditions of employment must be checked during the planning period.

In terms of taxation, the tax authority and the regulations of the host country must be examined in advance, and it is also worth checking whether there is any reporting obligation or not. The employer must also pay attention to possible permanent establishment risks in the given country. In this respect international tax rules should also be taken into consideration.

The social security situation is also an important issue to be resolved. Currently there are no separate regulations for workation, so it is recommended to conclude an additional accident and health insurance for the period abroad, and it is also worth finding out what kind of certificate is required to verify the Hungarian insurance relationship.

The employer must also consider occupational health and safety issues, whether the place of work meets the safety standards or not. The employer is obliged to ensure the necessary conditions for the employee to work safely. It is worth to draw up an internal regulation or to conclude a separate agreement with the employee in this regard.

Given that the demand for these new types of work is increasing, especially among the younger generation, the European Union is also working on the creation of related uniform regulations.


August 9, 2023.

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Should you have any questions regarding this newsletter, the tax experts of VGD Hungary will be pleased to assist you.

This newsletter provides general information and does not constitute advice.

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