Employees working abroad: UK employer duties
Reviewed by Mellow Editorial Team, HR & payroll content team
When one of your employees works abroad, you do not automatically stop having UK employer obligations. Your duties depend on where they work, for how long, and whether they remain within the scope of UK tax and employment law — which they often do, at least initially.
UK tax and National Insurance: what changes and what does not
If an employee is UK-resident and works temporarily overseas, they generally remain on your UK payroll. You continue to deduct income tax under PAYE and pay employer National Insurance at 13.8% unless HMRC agrees otherwise.
National Insurance is the area where specific rules apply most quickly. For short postings to countries that have a social security agreement with the UK, the employee can normally stay in the UK scheme (and avoid paying into both systems) if you obtain a certificate — an A1 for EEA countries or a certificate of coverage for others. Apply through HMRC before the posting begins.
For employees who become non-UK-resident, PAYE obligations can reduce or end, but this is not automatic. You need to follow the correct process using the HMRC guidance on operating PAYE for employees who leave the UK.
Employment law: does UK law still protect them?
UK employment rights do not simply switch off at the border. Courts and tribunals take a pragmatic view, looking at the strength of the connection to Great Britain. Relevant factors include where the contract was signed, where the employer is based, where the employee was recruited, and how the posting is structured.
Under the Employment Rights Act 2025, several rights now apply from day one of employment, which matters when you are onboarding someone who will immediately work overseas. You cannot contract out of UK statutory rights just because someone is physically located abroad.
Statutory annual leave entitlement (5.6 weeks, equating to 28 days including bank holidays for a five-day week) continues to apply. Statutory Sick Pay and family leave entitlements remain in place for employees who retain their UK employment relationship.
Host country obligations
Working in another country often creates obligations there too. Many countries impose local payroll registration, income tax withholding, social security contributions, or both, even for short stays. Some trigger these after just 60 or 90 days of physical presence; others after a tax year.
A concept called a "permanent establishment" also matters for corporate tax, not just employment tax. If your employee is signing contracts or conducting substantive business activity in another country, you may inadvertently create a taxable presence for the company in that jurisdiction. This is a conversation for your tax adviser, but it is worth flagging early.
The practical implication: do not assume that because someone is on your UK payroll and paid in sterling, the host country has no interest in them.
Reporting and payroll administration
Your RTI reporting obligations to HMRC continue for as long as you are running UK PAYE for the individual. That means filing a Full Payment Submission (FPS) on or before each payday, issuing a P60 by 31 May after the tax year end, and submitting a P11D by 6 July if any expenses or benefits apply.
If an employee is sent abroad and you cover costs such as accommodation, travel, or cost-of-living supplements, consider whether these are taxable benefits. HMRC has specific rules about overseas expenses, and some are exempt; others are not. Getting this wrong leads to P11D corrections and penalty risk.
Where an employee works across multiple countries in a week or month, deciding which earnings are taxable where can become genuinely complex. A split payroll arrangement — running payroll in two countries simultaneously — is sometimes the right answer, but it requires careful coordination.
Practical steps before someone leaves
A short checklist that saves problems later:
Check residency status. Will the employee remain UK-resident? Use the Statutory Residence Test if the position is long-term or permanent.
Apply for social security certificates early. Processing takes time and you need them in place before the employee starts work abroad.
Review the employment contract. Does it specify governing law and jurisdiction? Does it reference the host country's mandatory protections?
Assess host country obligations. Even a short project posting can trigger registration requirements. Take local advice for the country in question.
Agree an expenses policy. Set out clearly what the company will cover and how it will be treated for tax purposes.
Maintain RTI compliance. Unless HMRC has confirmed you should stop, keep filing on time. How Mellow runs payroll across six countries shows how multi-country payroll can work in practice without creating compliance gaps.
The key principle throughout is that UK obligations persist until they are formally varied or extinguished — they do not simply fade because someone has boarded a flight.
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