Tools · For employers

Can they work from there?

For managers and HR. Someone on your team wants to work from abroad for a while. Tell us where, and for how long, and we will show you the four things that can turn a yes into a tax bill: their residence, your payroll, social security, and a taxable presence for the company.

UK employer · Costa Rica · 6 months, about 183 days

2 real risks: get advice before you agree.

  • 0 low
  • 2 to watch
  • 2 high

  1. Their tax residence

    Watch

    Right at the day line

    A few days either way decides it. About 183 days does not reach Costa Rica's line, if the stay falls in one counting period. A home, family or main interests there can still make them resident. The rule: More than 183 days in the calendar year, in one go or not, counting the days you arrive and leave. Short trips away still count unless you hold a tax residency certificate from another country. Costa Rica taxes only income from Costa Rican sources, and digital nomad stay holders are exempt from income tax. A move to taxing worldwide income is planned but had not been presented by July 2026.

    The rule, as the tax tracker states it

  2. Your payroll

    High

    No treaty to rely on

    There is no UK tax treaty with Costa Rica, so nothing limits Costa Rica's right to tax the salary for work done there under its own rules. Whether that means you must run payroll there depends on local rules, which an adviser should check.

    HMRC, tax treaties

  3. Social security

    Watch

    UK cover for 52 weeks

    The UK has no social security agreement with Costa Rica. HMRC's rule is that Class 1 National Insurance continues for the first 52 weeks abroad if the employer has a place of business in the UK and the employee lived in the UK before. Nothing stops Costa Rica charging its own contributions as well.

    gov.uk, reciprocal social security agreements · HMRC, Social security abroad (NI38), updated 7 July 2026

  4. A taxable presence

    High

    No treaty to limit it

    There is no UK tax treaty with Costa Rica, so the OECD guidance on home offices does not apply. Costa Rica's own law decides whether the company has a taxable presence, and its test can be stricter than a treaty's.

    HMRC, tax treaties

On the UK side

HMRC's PAYE Manual says that if an employee is sent abroad by the employer, the employer must continue to operate PAYE, unless HMRC issues a code that says otherwise. Form P85 is for someone leaving the UK to live or work abroad full-time, so a stay like this does not usually need one. HMRC PAYE Manual, PAYE81640

In Costa Rica

Costa Rica's digital nomad law is for people working remotely whose services are received outside Costa Rica. It asks for income of at least USD 3,000 a month, or USD 4,000 with family. KPMG says income from abroad is not Costa Rican-source income for holders, and the law exempts them from income tax. KPMG, Costa Rica digital nomad law

This is not tax or legal advice. It is the first filter: it tells you which questions to take to an adviser, and gives you the rule and source behind each one. Every case turns on facts it cannot see, from where the employee is resident to what their contract says.

How it counts. The stay is treated as one continuous stay of about 30 days a month, inside one counting period. Treaty lines are taken from each treaty's employment article; the residence lines come from the tax tracker. Checked 4 October 2026 against HMRC's and the IRS's treaty lists, the treaty texts, HMRC's NI38 guidance, gov.uk's guidance under the UK-EU trade agreement, and the SSA's list of agreements.

What it does not cover. Employment law, immigration (whether they may work there at all), and local payroll registration rules beyond those named. The OECD guidance on home offices comes from a summary of the November 2025 update; the OECD text itself could not be read for this page.