Workday getaway: How to take a workcation
Fancy exploring the world without taking any annual leave? Well, a workcation may be the answer.
This growing travel trend allows remote workers to visit new destinations, while continuing with their usual work commitments.
Think Zoom calls from a beach in Tenerife, or roaming the streets of Lisbon after a day of work calls.
"When successful, workcations provide the ideal balance, enabling employees to refresh and recharge in a new environment without sacrificing their annual leave," said Barry Whelan, CEO of Excel Recruitment.
"As a result, many workers see it as an opportunity to boost their productivity and creativity, inspired by new surroundings.
"But it has to be remembered that for many reasons, workcations are not possible for many workers and often not desirable for many employers," he added.
What are the top workcation destinations?
The Hungarian capital of Budapest topped a list of the world's best cities for workcations this year, followed by Barcelona, Rio de Janeiro and Beijing.
The research was carried out by flexible and hybrid workspace operator International Work Group (IWG).
Lisbon, New York, Singapore, Jakarta, Los Angeles and Milan completed the top ten cities on the list.
Lisbon, Portugal
Are workcations popular with Irish workers?
Over half of workers in Ireland have some flexibility in their work arrangements, opening up new possibilities for travel.
That's according to the findings of a survey by Dutch online bank Bunq.
It reveals that over 60% of Irish workers have already taken advantage of remote work, by working from a location other than home.
Meanwhile, over half have embraced the trend of workcations.
"Our research highlights a trend we've observed among our users - a shift in what Irish travellers value and prioritise," said Bianca Zwart, Chief of Staff to the CEO at Bunq.
"It's clear that travel is more than just a break from routine - it's an integral part of life," she added.
The majority of those surveyed - 85% said they would like to take a workcation, either in Ireland or abroad.
However, barriers such as employer policies and cost were holding them back.
Do I have to tell my employer if I'm taking a workcation?
While some may be tempted to take a "hush trip" and secretly jet off without telling their boss, this can cause problems.
"There have been lots of situations where employees have simply gone abroad without telling their employer, and not realising the issues it can create," said Síobhra Rush, Partner at law firm Lewis Silkin.
She said employers can deal with the issue as a potential disciplinary matter.
"There's no positive statutory obligation, but there may be legal and tax implications for an employer where an employee works for a certain period abroad," Ms Rush explained.
"As such, it’s important for an employer to be clear about whether working from overseas will be permitted, and if so, what terms and conditions will apply to that work," she added.
Ms Rush said employers should consider having a standalone policy on working overseas, as opposed to including it in a hybrid working policy.
"In that way, the employee is clear about what is expected and their obligations," she added.
She said policies should cover things like duration, privacy in the work space, adequate technology and WiFi, a suitable work space from a health and safety perspective, and any impact that a different time zone would have on working hours.
Could workcations make companies more vulnerable to data breaches?
If an employee's role involves processing personal data, this can give rise to data protection issues.
Ms Rush of Lewis Silkin said the employer must ensure that it is not breaching any data protection laws or contracts with customers and third parties as a result of an employee processing personal data in another country.
"It should seek local law advice on whether any local data protection regimes apply to the processing, " Ms Rush advised.
"The employer may need to implement technical and organisational measures to protect data while it is being processed by an employee in another country as part of their role.
"This can include ensuring that devices have the necessary updates, and locally stored data is adequately and securely backed up," she explained.
She said employers must also consider whether the employee is transferring personal data to a third country - a country outside the EEA or that has not received an adequacy decision from the European Commission.
"If there is a transfer, then the employing entity must ensure that this transfer complies with the GDPR," she added.
To minimise risks, Ms Rush said employers should regularly train employees to take appropriate security measures when accessing personal data from another country.
Can I legally work from another country?
One of the first questions which must be asked, is whether you have the right to work from another country.
If you don't, Jennifer Sweeney, Tax Director at EY said civil and criminal liability for the worker and the employer can arise.
"If further visas for the employee need to be obtained to allow them to work abroad while on holiday, employers need to ask what level of oversight is expected from them, and if they are going to meet the cost in obtaining these visas," she said.
Ms Sweeney said conditions in the new location also need to be considered, such as access to healthcare systems for routine or emergency treatment.
"For example, is private healthcare cover to be in place and who is responsible for the additional cost?," she said.
Will a workcation impact the tax I pay?
You may work for an Irish employer under an Irish employment contract, however, where you physically perform your employment duties determines if a charge to income tax will arise in that location.
Ms Sweeney of EY said relief under a Double Taxation Agreement (DTA) between Ireland and the relevant country may be available to relieve the foreign income tax charge, or the jurisdiction may not seek to tax employees with a lower number of workdays in their location.
"It should be kept in mind that Irish PAYE will continue to be deducted from the employee's pay which can lead to the individual having to file personal tax returns in Ireland and the foreign jurisdiction to claim any reliefs and ensure the correct amount of tax due is paid to each revenue authority," she added.
For longer term stays, Ms Sweeney said the employee may trigger tax residence in the workcation jurisdiction.
She said this can lead to the individual becoming subject to a range of local taxes such as capital gains tax, wealth taxes, in addition to income tax.
"This further complicates the individual's tax affairs where assistance from a tax advisor may be required," she explained.
Ms Sweeney said a social security liability may also arise in the foreign country as a result of the individual working in that location.
She pointed out that local tax and social security in the foreign country may be at a higher rate than Ireland, depending on the country.
On the employer side, Ms Sweeney said companies need to be mindful of local payroll tax obligations and determine whether there are concessions available.
She said the employer needs to determine if an application or other paperwork needs to be submitted to the local Revenue Authority to avail of the concession.
"Some countries may have a de minus for workdays spent in the country before an employer must operate local payroll taxes, other countries may not have such a concession in place and local payroll taxes may be payable from the first workday," she added.
Depending on the seniority of the employee within the organisation and the type of activities carried out while on their workcation, Ms Sweeney said an employee may inadvertently create a Permanent Establishment (PE) or presence for Corporation Tax purposes in a foreign location for their employer.
"This can bring the employer’s organisation within the charge of a range of business taxes and reporting obligations in the foreign jurisdiction," she explained.
"Employers need to able to identify and take the necessary steps to reduce such risks when allowing employees to work abroad," she added.
Are workcations a new perk to attract and retain staff?
While the idea of workcations is gaining traction among employees, Barry Whelan, CEO of Excel Recruitment says it hasn't yet become a widespread formal offering from companies as a specific benefit to attract or retain staff.
But he said this could change.
"Currently, most companies that allow workcations do so informally, as part of their broader remote work policies," Mr Whelan said.
"As the concept becomes more popular, it's possible that we’ll see more organisations start to promote workcations as a perk, especially in competitive industries where attracting and retaining top talent is crucial," he added.
How do I make my workcation a success?
Workers need to plan ahead by ensuring that their job responsibilities can be managed effectively from the new location.
Mr Whelan of Excel Recruitment said this includes checking the quality of the internet connection, understanding time zone differences, and ensuring that you have the necessary tools and resources to work efficiently.
Striking a balance between work and relaxation is key, Mr Whelan said.
"It might be tempting to fully immerse yourself in the new environment, but you must remember that a workcation still involves work," he said.
"Set clear boundaries for work hours so you can enjoy your time away without compromising your professional responsibilities," he said.
He suggests staying engaged with your team and projects, to ensure that you remain visible and connected.
"This can prevent any potential negative impacts on your career progression," he said.
"A well-planned workcation has the potential to be a positive experience, but it requires careful consideration and communication to be successful," he added.
