Workation or assignment? Learn the key differences, the tax, labor law, and compliance risks involved – and how HR teams can manage both models efficiently, legally, and digitally.
Workation or assignment? If you allow employees to work abroad, you need to know the difference. While a workation is typically short-term and voluntary, an assignment is a formal deployment abroad with major legal implications. This article highlights the key differences – and how HR and Compliance can manage both securely and efficiently.
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Remote work from abroad has become part of everyday life for many companies – whether it’s a few weeks in the sun or a longer international assignment. But not all types of overseas work are the same. There’s a clear difference between a workation and an assignment, with serious implications for tax, social security, labor law, and internal HR processes.
In this article, we explain how the two models differ, what they mean for your company, and how to manage them compliantly and efficiently.
What Exactly Is a Workation?
A workation is a temporary, employee-initiated stay abroad during which the employee continues working for their employer in their home country. The employment contract and country of residence remain unchanged. Workations typically last a few weeks or months.
Example:
An employee based in Zurich works from an Airbnb in Lisbon for four weeks. She remains insured in Switzerland and continues to receive her usual salary – just with an ocean view.
Typical Characteristics:
Initiated by the employee
Short-term stay (often < 90 days)
No business engagement in the host country
No change to employment contract or salary
Usually no tax or registration obligations abroad (depending on location and duration)
And What Is an Assignment?
An assignment is something else entirely: the employee is formally sent abroad by the company, for example to support a project, set up a team, or serve clients on-site. Assignments often last several months or even years.
Example:
An employee is sent to the company’s French subsidiary for one year to lead a project. The contract is amended accordingly, possibly with a local salary component.
Typical Characteristics:
Organized by the employer
Medium- to long-term stay
Business activities in the host country
Contract and salary adjustments common
Often subject to tax and social security in the host country
Registration obligations or even permanent establishment risk
⚖️ Why the Legal Distinction Matters
1. Tax Law
Workation: Often not taxable abroad – as long as it's short-term, privately initiated, and without market presence.
Assignment: Usually taxable in the host country; double taxation agreements may apply.
2. Social Security
Workation: Typically remains covered in the home country (e.g., via A1 certificate in the EU).
Assignment: Social security may shift to the host country depending on duration and applicable agreements.
3. Permanent Establishment Risk
Workation: Low risk – provided no market-facing activities take place.
Assignment: Higher risk – especially with operational responsibilities.
4. Labor Law
Workation: Home country employment contract remains valid.
Assignment: Often requires contract addendums or new agreements.
Why HR and Compliance Need to Pay Attention
Misclassifying a case can have serious consequences:
Tax liabilities, legal violations, and compliance risks can become costly for employers.
That’s why companies need:
Clear internal policies
A structured review and approval process
Risk assessments based on location
Awareness training for managers and employees
How Vamoz Helps
With Vamoz, companies can manage workation requests simply, securely, and automatically – without tedious case-by-case analysis.
The platform:
Clearly distinguishes between workation and assignment
Checks risks like permanent establishment, tax obligations, and A1 requirements
Takes country-specific rules into account
Transparently documents approvals in an audit-proof way
This turns international mobility into an opportunity rather than a risk.
Conclusion: Two Models, Two Realities
Workation: Voluntary, short-term, low risk.
Assignment: Structured, complex, with legal implications.
Knowing the difference – and integrating it into processes, contracts, and tools – enables global flexibility without legal gray areas.
👉 Curious how to manage workations safely with Vamoz? Book a demo now!