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 · Malaysia · 6 months, about 183 days

1 real risk: get advice before you agree.

  • 0 low
  • 3 to watch
  • 1 high

  1. Their tax residence

    High

    They become tax resident there

    About 183 days crosses Malaysia's line on days alone. The rule: 182 days or more in a calendar year, with any part of a day counted as a whole day. Shorter stays can still make you resident if they link to 182 days in a row across two years, or if you spend 90 days a year in Malaysia over several years. This counts the main test only.

    The rule, as the tax tracker states it

  2. Your payroll

    Watch

    Inside the treaty's day line

    The 1996 agreement keeps the salary taxable only in the UK for an employee there no more than 183 days in any 12 months starting or ending in the tax year, paid by an employer not resident there, and not charged to a branch there. About 183 days is inside that, as long as the employee stays resident in the UK for treaty purposes. That is close to the line, so count the days carefully, including travel days.

    gov.uk, UK-Malaysia tax treaties · HMRC, tax treaties

  3. Social security

    Watch

    UK cover for 52 weeks

    The UK has no social security agreement with Malaysia. 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 Malaysia 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

    Watch

    Depends on the reason

    The OECD's November 2025 guidance says a home generally will not count as a fixed place of business if the employee works from it for less than half their working time over 12 months. At half or more, it asks whether the company has a commercial reason for them to be there; keeping the employee happy or saving office costs does not count. Countries do not all follow OECD guidance.

    OECD, November 2025 update to the Model Tax Convention · Deloitte summary of the OECD 2025 update

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 Malaysia

MDEC's DE Rantau FAQ says remote workers are exempt from Malaysian tax only for stays of 60 days or fewer. MDEC, DE Rantau pass FAQ

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.