Working where others vacation?
Staying by the sea for a few extra days, working with a view of the mountains, or combining a family vacation with a few workdays – workations have become increasingly popular in recent years. What began as remote work in many places during the COVID-19 pandemic has evolved into an attractive employee benefit for many companies.
Startups and internationally operating companies in particular promote flexible working models. At the same time, employees increasingly want to combine work and travel. Remote work has long provided the foundation for this: According to the German Federal Statistical Office (Destatis), 25% of employed people in Germany worked from home at least occasionally in 2025.
However straightforward a workation may seem at first glance, the legal, tax, and organizational questions behind it can be complex.
Who is allowed to work from abroad? Which countries are suitable? When is an A1 certificate required? What role do social security, data protection, and taxes play? And how can companies establish a clear process?
This article provides an overview of the key issues companies should consider before approving a workation.
What exactly is a workation?
The term combines the words work and vacation.
It refers to temporarily working from a vacation destination or another location abroad. It is not a vacation in the traditional sense: Employees continue to work as usual and fulfill their contractual duties.
Only the place of work changes.
Typical examples include:
- working from Italy for a week after a summer vacation,
- spending a few workdays in Spain during school holidays,
- extending a stay with family abroad, or
- working from a vacation home within the European Union.
A workation must therefore be clearly distinguished from regular vacation, which is intended exclusively for rest and recovery. During a workation, the employment contract, working-time requirements, and agreed company policies continue to apply.
Remote work is not automatically a workation
Many companies now allow employees to work remotely or from home.
However, this does not automatically mean that employees may work from anywhere in the world.
There are significant differences between working from home within Germany, remote work, and a workation abroad. Guidance from Germany’s Federal Ministry of Labour and Social Affairs (BMAS) on home office arrangements and cross-border telework also shows that additional rules must be considered when work is performed across national borders.
As soon as employees of a Germany-based company work outside Germany, additional questions may arise under employment law, social security law, tax law, and data protection requirements.
Every workation should therefore be formally approved and should not be covered solely by a general remote-work policy.
Why companies need clear rules
In many companies, workation requests arise spontaneously. An employee asks whether they can “stay in Portugal for two more weeks.” A manager agrees – often without knowing the potential implications. This is where risks emerge.
A company-wide workation policy creates clarity for everyone involved. For example, it can define:
- which countries are generally permitted,
- the maximum permitted duration,
- which approvals are required,
- which technical requirements must be met,
- which working hours and public holiday rules apply,
- how data protection will be ensured,
- which costs the company will cover, and
- which documents must be available before departure.
Clear rules create transparency and avoid inconsistent case-by-case decisions.
The A1 certificate – an often-overlooked requirement
A common misconception is that an A1 certificate is required only for longer assignments abroad.
In fact, there is no general minimum-duration exemption. Even short periods of work abroad may require an A1 certificate. It is relevant for work performed in the EU, the European Economic Area (EEA), Switzerland, and – subject to the applicable rules – the United Kingdom. For Germany-based employers, the application must be submitted electronically. The German Pension Insurance provides an overview in its A1 certificate FAQ.
As a general rule, the A1 certificate should be requested before the employee starts working abroad. Under German guidance, it may be requested retroactively if necessary for short business trips of up to seven days. However, because some countries – particularly France, Austria, and Switzerland – carry out more frequent checks, applying in advance is often advisable.
Even though a workation is often initiated by the employee and is not a traditional business trip, companies should review this requirement at an early stage.
Social security and taxes
In addition to the A1 certificate, social security and tax implications play an important role.
Even performing part of an employee’s work from another EU Member State can affect which country’s social security legislation applies. This is particularly relevant when cross-border work or telework occurs regularly. The German Liaison Office for Health Insurance Abroad (DVKA) provides information on postings and cross-border employment.
The longer employees work abroad, or the more frequently these stays occur, the more carefully companies should assess:
- which country’s social security legislation applies,
- whether tax obligations may arise,
- whether registration or reporting obligations apply,
- whether the arrangement could create a permanent establishment, and
- which country-specific requirements must be observed.
Requirements can differ considerably, especially outside the European Union.
Workations should therefore be reviewed individually rather than approved under a blanket rule.
Do not underestimate data protection
Data protection and information security are also critical.
Employees working from a café, hotel, or coworking space face different risks than they would in a home office.
Companies should therefore establish clear requirements, such as:
- using a VPN,
- using encrypted devices,
- avoiding unsecured public Wi-Fi networks,
- using privacy screens when handling confidential data, and
- storing work devices securely.
This is particularly important for companies that handle sensitive employee, customer, or financial data.
Working time still applies
Agreed working hours continue to apply during a workation, regardless of whether employees are working from Italy, Canada, or Thailand.
If companies permit workations outside Europe, they should also consider time-zone differences.
Core working hours, team meetings, customer communication, and availability cannot be organized in the same way across every time zone. Binding arrangements should therefore be agreed before departure.
This helps prevent misunderstandings while ensuring effective collaboration within the team.
Best practices for companies
More companies are developing their own workation policies, and several common principles have emerged.
Many companies:
- limit workations to specific countries or regions, such as the EU or EEA,
- set a maximum of around 20 to 30 working days per calendar year,
- establish a formal approval process,
- require employees to apply well in advance,
- review social security and tax implications beforehand,
- document all approved stays,
- define binding data protection requirements, and
- evaluate the arrangement after the employee returns.
For workations outside the EU, companies should also review the destination country’s entry and residence requirements. Depending on the country, the employee’s nationality, the duration, and the type of work, a visa or work authorization may be required. A tourist visa does not automatically permit professional activities. Some countries now offer specific workation or digital nomad visas, but the eligibility requirements vary.
There is no one-size-fits-all approach. The most appropriate rules depend on factors including the industry, company size, and international footprint.
Which companies are workations suitable for?
Not every company needs to offer workations, and not every role is suitable for them.
Workations often work well for primarily digital roles in areas such as:
- software development,
- marketing,
- HR and payroll,
- finance,
- consulting, and
- project management.
They are less suitable for roles that require a strong on-site presence or direct in-person customer contact.
Ultimately, the decisive factor is not the industry, but whether the work can be performed remotely, securely, and effectively from an organizational perspective.
Questions companies should answer before every approval
Before approving a workation, companies should take a structured look at the key conditions.
The following questions should be addressed:
- Which country will the employee work from?
- How long will the workation last?
- Is an A1 certificate required?
- Are there any tax or social security risks?
- Can data protection requirements be met?
- Have working hours and time zones been coordinated?
- Is the role generally suitable for a workation?
- Has the responsible manager approved the request?
The more structured the review, the lower the risk of unexpected issues later. At the same time, managing workations manually becomes more time-consuming as the number of requests increases. Specialized solutions such as WorkFlex can support companies with approval processes and the assessment of country-specific compliance requirements.
Conclusion
Workations give companies and employees new ways to make work more flexible. At the same time, they raise employment law, tax, social security, and data protection questions that should not be underestimated.
A successful workation therefore begins not with booking a flight, but with clear policies, transparent processes, and a careful review of each individual case.
Note: Legal requirements change regularly and depend on the individual circumstances. For longer stays or work performed outside the European Union in particular, companies should obtain a case-specific assessment of the employment law, tax, and social security implications.
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