Workation: What Employers and Employees Need to Consider

If companies based in Germany allow their workforce to work temporarily and remotely from abroad—also known as a workation—this has become, for many jobseekers, one of several criteria when deciding for or against taking up employment with a particular company or changing jobs. According to a workation study, significantly more than half of employees now expect their employers to permit remote work not only within Germany but also from abroad.

Nevertheless, both companies and employees are often not sufficiently informed about the legal and tax requirements and consequences. Employment contracts and supplementary agreements frequently lack legally secure provisions. Clearly defined regulations are essential, particularly for liability reasons. Companies should therefore review—or have reviewed in advance—the relevant tax, employment, and social security regulations.

Workation must be clearly distinguished from permanent employment abroad for the company; likewise, working in a foreign branch of a German company does not constitute a workation.

The following points should be clarified in advance and/or contractually agreed:

• Internal company policies should clearly define which groups of employees are eligible to use the workation option.

  
  

• In the case of a temporary workation of up to four weeks, German employment law applies; public holidays at the place of work also apply to the employee.

  
  

• If a workation lasts longer than four weeks, the company must provide the employee with written confirmation and additional information, for example regarding the duration of the stay and the currency in which remuneration is paid (Verification Act – Nachweisgesetz).

  
  

• If a workation lasts more than six months, the employment law of the workation country applies with regard to remuneration, notice periods, working hours, and vacation entitlements.

  
  

• Longer workations in non-EU countries generally require a visa; a tourist visa is not sufficient. Where applicable, a work visa or a specific workation visa must be applied for, which already exists in some countries.

  
  

Attention: Anyone working without a work permit is considered illegally employed and may be deported and subject to entry bans. For the employer, such conduct may result in a prohibition on carrying out business activities and substantial fines.

• Within the EU, the EEA, and Switzerland, employees may reside without restriction for work purposes. No visa is required. However, registration or reporting obligations must be observed in most countries.

  
  

• Anyone working abroad for a maximum of 183 days per year remains subject to unlimited tax liability in Germany; in the case of a longer stay, tax liability arises abroad.

  
  

• If a workation lasts longer than four weeks, the employer in particular must consider employment-law and tax consequences. Employers should always inform themselves independently about these matters.

  
  

Compliance with social security requirements and their consequences is also essential:

• In the case of a workation in a third country outside the EU, it must be examined whether a social security agreement exists between Germany and the respective country. This information should be obtained in good time. Advice from or consultation with a specialist in international assignments is advisable.

  
  

• For a workation within the EU, the EEA, or Switzerland, the employee requires a so-called A1 certificate, which serves as proof of social security coverage and can be applied for electronically by the employer or the employee.

  
  

• It should be noted that, as of 2025, cross-border commuters also require such an A1 certificate, even if no workation takes place.

If an employer approves a workation in another EU country, this is deemed, for social security purposes, to constitute a posting. The employer thereby undertakes to be liable for ensuring that health insurance coverage exists for its employees and accompanying family members, or to ensure that such coverage is in place.

The temporary posting of an employee from Germany, on behalf of a domestic company, to another European country must be limited in time in advance. Remuneration must be processed through payroll in Germany. A foreign posting does not exist if the posted person lives abroad and is hired by a German company to work in their home country or another country. The person must not have been employed in Germany prior to the assignment, nor have had their residence or habitual place of stay in Germany beforehand.