HI everyone,
Is it legally possible for companies to allow you to work remotely anywhere in the world?
I was told that companies can only let you work remotely in states/countries where they have offices. Is this true?
I was thinking in the future, how awesome it would be if I could just travel around the world and just work remotely in hotels.
Legally? No.
You can legally work anywhere in the US (gotta still report for state income tax, but itâs less trackable). Once youâre out of the country, tax becomes a big issue.
Do people still do it? Absolutely.
My company had to send out a lengthy email asking people not to WFH from Mexico a few months into COVID
I work remotely in a state my company does not have offices. It is my home state, so that might make a difference
Coworkers have spent months in other states, but one has a 2nd home, other long term rental, but kids enrolled in school.
As a supervisor I would have issue with work/ vacation balance, and possible IT issues, if not establishing a residence for a period.
Inside of the US youâd have possibly file income taxes in the states you worked in, based on how long you worked there. Youâd need to ask an accountant because I think this might vary by state.
Outside of the US you run into more issues. Thereâs tax stuff, but also your companyâs IT might block certain countries. I knew someone who would try to do this often. He went to Australia for a month and had to go through a lot of hoops to be able to log into work from there, because apparently it was on the blacklist of countries.
So, my companyâs RTO plans include an allowance for everyone who wants to WFH, when WFH is compatible with duties/team function, to do so.
In the discussion around this, the question came up: can an employee live abroad and WFH. The answer was a fairly hard ânoâ â the implications for taxes and benefits across international borders are complicated, and a greater burden than HR can justify supporting.
(The only reason itâs not an absolute ânoâ is that we do have divisions abroad, but even that is a little messy. I functionally work for a team in a different country where I live, but to make it work, Iâm formally employed by the division of my company in my home country, and that division contracts my services to the division of the company in the other country. Throw in the implications of differing data security laws on network/file access⌠Itâs a bureaucratic headache.)
That being said, I am aware of a significant number of folks who do work while traveling abroad. While a few of them may be employed by multinational companies that have that sort of capability, I think most of the folks who make it work are formally independent contractors, rather than conventional employees. The tax and benefit headaches get shifted to the employee/independent contractor.
Pretty sure you still need a work visa to work abroad, at least for most countries. And if youâre permanently employed by a company, your employer would need to sponsor you. People lie about that, naturally, and claim to be there for only tourism. That can get you in pretty big trouble if caught.
Then thereâs the security issue. Your employer will probably be able to figure out if youâre connecting abroad from a company owned laptop.
Anyway, I wouldnât take the risk.
if you work in another state for a few months, how would the IRS even know about it?
another country sounds trickier.
While it varies from country to country (and there are definitely some weird variations), there is latitude in several (many) countriesâ laws/regs when it comes to international telecommuting.
For example, in Canada work eligibility requirements only come into play when looking at âCanadian workâ, the definition of which is probably best left at the hands of a lawyer, but which seems to be driven by the fundamental question of âare you trying to take a job away from a Canadian citizen or permanent residentâ.
An American citizen, living in Canada, telecommuting to an American job generally wonât fail this test. In the eyes of the Canadian government, theyâre free to live in Canada without need of a work permit or residency status, as long as they flagpole the border every six months.
There are a few countries that, particularly in light of the rise of telecommuting, that are now granting longer-term visas to digital nomads.
But I think that generally, as long as you arenât trying to work a conventional domestic job, establish residency, or join domestic social benefit programs, most first-world countries tolerate long-term visitors being physically present in within their borders while telecommuting back âhomeâ.
abroad brings out work visa related concerns. company is invested in you providing work - and the host country telling you to stop immediately for working illegally is a risk your company might not want to endure.
state by state - the vagabond life sounds great but I think actually working in various states means you are earning in them all and you as a taxpayer might have tax burdens in various states. company shouldnât be as worried about that, unless they somehow owe tax for an employee earning state by state.
The IRS doesnât really care what state you live in. From the IRSâs viewpoint, if you work in the US or if youâre a US citizen (regardless of where in the world you live), you pay US taxes. Easy-peasy.
The real headache when it comes to state of residence is the conflicting state rules on the subject.
if you live in one state that has state income taxes but go to another state to work for a while that doesnât, you could possibly be overpaying taxes if you donât bother accounting for this.
Yeah, but all states still have a federal income tax, which is all the IRS cares about. The state income taxes are different, and the individual statesâ problem to deal with (and yours).
In the Before Times, my travel patterns were such that I spent a material amount of time in a no-income-tax state. I looked into whether I could use that to reduce my tax burden.
I came down on the side that the headache of documenting days worked by state, the potential exposure to taxation by other states I visited, and the likelihood Iâd have to waste time arguing this with at least one set of state tax people would more than offset any tax savings I might be able to claim.
(I also became acquainted with the âconvenience ruleâ, the concept that if youâre working in a particular state is for the employeeâs convenience, rather than an actual geographic requirement of the employer, that work is exposed to your home stateâs taxes. But not every state subscribes to the âconvenience ruleâ, further complicating matters. I wouldnât be surprised if there are some combinations that might expose workers to double-state taxation.)
VISA is not an issue if youâre there for a couple weeks to a month. Youâre basically using a travel visa.
What if I book a vacation for a month somewhere in South America but work 2 weeks and spend 1 week as part of PTO?
This shouldnât be an issue as long as this is not abused right?
Personally, I wouldnât even care about the legality of something like that. 2 weeks of work while on a rather lengthy vacation? No government is going to care as long as youâre paying US taxes (The US is one of the only countries in the world that taxes itâs citizens no matter what they do, who they do it for or where they do it).
Like others have said, company IT is probably the biggest issue youâll face. They might not have a VPN set up for working from that country/region or some of their software might not support connections from that region. Ultimately, you probably want to follow company rules. And yes, they can track from where youâre connecting.
The IRS generally doesnât care because your federal taxes are generally the same in all states. The states and municipality care because they may collect certain state/municipality employment/income taxes from you and your employer as well as being subject to various employment laws that differ from state to state. This is also why your company likely cares within the US, because they are subject to the employment laws which may vary, and be more restrictive, than your âofficialâ state of employment.
100% against my companyâs policy and not allowed.
You have to take all of the time as PTO.
but if the company allows flexible/WFH, would they know you were abroad?
IT would almost certainly know unless you took measures like connecting to the corporate VPN through a private VPN with domestic outlet.
(Given how locked down my work computer is, Iâm not certain that would even be possible for me.)
Have you ever received an email from a streaming service or financial company, or gmail saying âA new device from âinsert region hereâ just accessed your account, was this you?â
They can trace where you are when you access their network. In fact, they can even trace what type of device you used (laptop vs. mobile device; Android vs. Apple, etc.) If youâre taking the extra steps necessary to trick your company into thinking youâre connecting from home, then youâre obviously braking some rules they donât want you to break, and additionally risk getting locked out by IT if your connection looks suspicious.