Where your salary is taxed when you work remotely abroad
Employment income is taxed where the work is physically done. Under Article 15 of the OECD Model Tax Convention, the country you work from may tax the salary for the days you work there, and your country of residence taxes it too unless the treaty tells it to give way.
Your employer's address, the bank that pays you and the currency of the salary do not change this. A London employee of a UK company who spends 4 months working from Lisbon has done 4 months of work in Portugal, whatever the pay stub says.
The same split runs through digital nomad taxes in general: residence decides where you are taxed on everything, and the place of work decides who else may tax the salary. For an employee, the outcome turns on the days spent in the host country, who the employer is, and whether a tax treaty links the 2 countries.
The 183-day rule for remote employees has 3 conditions
Staying 183 days or less is only 1 of 3 conditions. Article 15(2) of the OECD Model keeps your salary taxable only at home if all 3 of these hold:
- You are present in the host country for 183 days or less in any 12-month period that starts or ends in the tax year concerned.
- Your salary is paid by, or on behalf of, an employer that is not resident in the host country.
- Your salary is not borne by a permanent establishment that your employer has in the host country.
Fail any of the 3 and the host country may tax from your first working day there. This treaty version of the 183-day rule counts physical presence over a rolling 12 months, so 2 stays of 100 days on either side of a new year can still exceed 183 in one window.
Reading the 183-day exemption correctly
Exempt in the host country
Resident in Germany, employed by a Berlin company with no office in Spain, works 120 days from Valencia in a 12-month period. All 3 conditions hold, so under the treaty the salary stays taxable only in Germany.
Taxable from day 1
Resident in Germany but moved onto the payroll of the employer's Spanish subsidiary, works the same 120 days from Valencia and assumes that under 183 days means no Spanish tax. The employer is now resident in Spain, so the second condition fails and Spain can tax the Valencia days from the first one.
No treaty, no 183-day exemption
The exemption lives inside a tax treaty. Between 2 countries without one, the host country's own law decides, and it can start sooner: Malaysia exempts a foreign remote worker only for stays of 60 days or fewer in a year, and Thailand taxes employment carried on in Thailand for residents and non-residents alike, wherever the salary is paid.
When working abroad makes you tax resident there
The treaty's 183 days decide only who may tax the salary. Each country's residence test runs separately, and a long stay can make you resident in the host country and taxable there on worldwide income. Many countries use a 183-day count, but tax residency tests that look at a home kept available or a family living with you can make you resident sooner.
If both countries then claim you, dual tax residency is settled by the treaty's tie-breakers in a fixed order: a permanent home, then the center of vital interests, then habitual abode, then nationality, and if that does not settle it, agreement between the 2 tax authorities (Article 4(2) of the OECD Model).
Double taxation relief: exemption or credit
Where the treaty lets the host country tax your salary, your country of residence must give relief: under the OECD Model it either exempts that income (Article 23A) or gives a foreign tax credit for the host country's tax (Article 23B).
The credit is capped at the home tax on that same income, so under the credit method you end up paying roughly the higher of the 2 countries' tax on those days. Working from a lower-tax country saves nothing while you stay resident in a higher-tax one that credits.
Your employer's risk: a permanent establishment in your home office
Your employer has a separate problem. If your home office counts as its permanent establishment, a fixed place of business through which it carries on its business (OECD Model, Article 5), the host country can tax the profit attributable to it. If that establishment also bears your salary, the third condition of the 183-day exemption fails, so the host country can tax your pay from the first day.
The OECD's 2025 update to the Model Tax Convention draws the line at 50% of your working time over any 12-month period: below it, a home is generally not the employer's place of business. Above it, the facts decide, chiefly whether there is a commercial reason for you to work from that country, such as meeting local customers in person or giving customers in other time zones real-time service, as round-the-clock support does. Having customers there, or living in a different time zone from head office, is not by itself a commercial reason. India and Nigeria disagree with parts of this text, Chile, Czechia and Israel recorded observations limiting how they apply it, and Malaysia reserves the right to agree a different percentage in its treaties, so their tax authorities may read a home office more broadly.
Sales roles carry a second risk: someone who habitually concludes contracts for the company, or habitually plays the principal role leading to contracts that the company routinely concludes without material changes, can create a permanent establishment with no office at all (OECD Model, Article 5(5)).
A home office under and over the OECD line
Generally not a place of business
A developer on an Amsterdam payroll works 40% of her time from her apartment in Lisbon and the rest from the Amsterdam office. Below the OECD line, the apartment is generally not her employer's place of business in Portugal.
Can be a permanent establishment
An account manager on the same payroll works from Lisbon full time and meets Portuguese clients there every week. Above the line, with a commercial reason to be in Portugal, the home office can be the employer's permanent establishment there.
Payroll and social security when you work from another country
If the host country may tax your salary, someone has to collect the tax: some countries make a foreign employer register and withhold locally, and others let the employee pay it directly.
Social contributions follow the place of work, not your tax residence, so they can land in a different country from your income tax. There are 3 ways for an employee to stay in 1 system: an EU posting of up to 24 months with an A1 certificate (European Commission), a joint request under the framework agreement on cross-border telework when you telework from your country of residence less than 50% of your working time, and a US posting expected to last 5 years or less (SSA). With none of these, both countries can charge social security on the same salary.
Where a remote employee pays social contributions
| Your situation | Where you pay | Proof |
|---|---|---|
| Posted by your employer to another EU country, up to 24 months | Home country | A1 from the home country |
| Teleworking from your EU, EEA or Swiss home country less than 50% of the time, employer in another signatory state | Employer's country, on a joint request | Approval from the competent institution |
| Working in 2 or more EU countries, at least 25% of it in your country of residence | Country of residence | A1 from that country |
| Sent by a US employer to an agreement country, expected to last 5 years or less | United States only | US certificate of coverage |
| US citizen employed abroad by an American employer, no agreement | United States, and possibly the host country as well | None |
| Sent by a UK employer to a country with no agreement | UK for the first 52 weeks if the conditions are met, plus any host contributions | None |
In a country with no social security agreement, a UK employer keeps paying Class 1 National Insurance for your first 52 weeks abroad when it has a UK place of business, you are ordinarily resident in the UK and you were living there just before you left (HMRC).
US citizens working remotely for a US employer
US citizens stay taxable in the US wherever they work (IRS). The foreign earned income exclusion can remove up to $132,900 of 2026 wages from US income tax for someone whose tax home is in a foreign country and who passes the 330-day physical presence test or the bona fide residence test (IRS Publication 54).
Social Security does not follow the exclusion. US Social Security and Medicare taxes continue to apply to wages for work you do abroad as an employee of an American employer (IRS), so FICA keeps coming out of the paycheck and the host country may charge its own contributions on top unless an agreement assigns you to 1 system.
Digital nomad visas that change the tax on your salary
A few countries have written rules for people who live there while working for a foreign employer. They change your tax and leave the employer's permanent establishment question where it was.
Residence permits with their own tax rule for pay from a foreign employer
| Permit | Tax on pay from a foreign employer | Limit |
|---|---|---|
| Croatia's digital nomad permit | 0% income tax; no compulsory Croatian health insurance contributions, though the permit requires travel or private health insurance covering Croatia; pension insurance only on request | Up to 18 months; non-EU, non-EEA and non-Swiss nationals only |
| Romania's digital nomad status | No income tax, pension (CAS) or health (CASS) contributions on the salary | 183 days or less in Romania in any 12 consecutive months |
| Malta's Nomad Residence Permit | A flat 10% on the authorized remote work income; income from the first 12 months is exempt only while your presence in Malta is merely casual (Deloitte Malta) | Third-country nationals working for a non-resident employer |
| Spain's inbound worker regime | 24% on salary up to €600,000 (about $683,000), 47% above | Year of arrival plus 5 years; not Spanish resident in the previous 5 years; remote employees qualify on the telework visa |
| Costa Rica's remote worker permit | Pay received from abroad is not Costa Rican-source and is exempt | Up to 1 year plus a 1-year extension; at least $3,000 a month of income |
| Barbados Welcome Stamp | Holders are deemed non-resident and their income is not derived from Barbados | 12 months, renewable; no work for anyone in Barbados |
Elsewhere a nomad permit is a permit to stay, and digital nomad visa tax follows the normal day and home tests: Brazil's digital nomad visa gives no tax break, and a holder becomes resident like anyone else on completing 183 days in Brazil within any 12-month period.
What to ask HR before you work from another country
Tell your employer before you go. Working from abroad without approval leaves the employer with filings it does not know it owes, and leaves you with any tax that payroll did not withhold.
Questions to settle with HR before you travel
- Which countries does the remote work policy allow, and for how many days in any 12 months?
- Will payroll register and withhold in the host country, or keep paying only at home?
- Has the company checked whether my role and my days there could create a permanent establishment?
- Will the company apply for an A1 or a certificate of coverage before I leave?
- If the company has no entity in that country, would it employ me through an employer of record?
- Who pays if the host country's tax is higher than home tax, and who files the returns?
- Does my residence permit allow remote work for a foreign employer?
If your employer cannot run payroll in the host country itself, an employer of record can: a local company employs you on its behalf and runs payroll there. Because that employer is resident in the host country, the 183-day exemption no longer applies, and your salary can be taxed there from the first day.
David's note
I would get the employer's answer in writing before booking anything. A manager's verbal yes is not a payroll decision, and the tax that payroll never withheld is still yours to pay.
