Guidance

Globally mobile employees and PAYE

Published 6 April 2025

This guidance gives you information about the application of PAYE to globally mobile employees and explains how it works from 6 April 2025. For the purpose of this guidance, where an employee comes to, or goes outside, the UK to work they are referred to as a ‘globally mobile employee’. You should read this guidance together with CWG2: further guide to PAYE and NICs to gain a better understanding.

If you want to make any new Globally Mobile Employee PAYE notifications and experience difficulties in completing and submitting the necessary forms ahead of your April payroll, you should contact HMRC through your usual route to discuss.

When you make a payment of employment income to an employee where they are liable to UK Income Tax, you need to operate PAYE on this payment. Operating PAYE is straightforward if you are based in the UK, and the employment income is for a tax year where your employee is UK resident and completing employment work in the UK.

If you are based outside the UK, or your employee carries out their employment duties wholly or partly outside the UK, this can affect the operation of PAYE.

If you’re an employer with no UK presence

There is a territorial limit to PAYE, so you are only required to operate PAYE if you have sufficient presence in the UK to allow any obligation to be enforced in the UK. If you are without a UK presence you can choose to voluntarily operate PAYE on payments of PAYE income that you make to employees.

If you do not have a UK presence and you send your employee to the UK to work for a UK entity, that entity must operate PAYE on any payments of PAYE income you make to the employee, unless you voluntarily operate PAYE on the payment.

When an employee works either wholly or partly outside the UK

If an employee works either wholly or partly outside the UK, this can affect the operation of PAYE. This depends on their residence position for the relevant tax year. If the employee is not UK resident for a tax year and works both in and outside the UK, it is their employment income which relates to their UK work that will be chargeable to UK Income Tax. This means only part of the employment income paid may be PAYE income.

When a tax year is a split year for the employee, this means any employment income for the overseas part of the year will only be chargeable to UK Income Tax if any of it related to work done in the UK during the overseas part of the year, or it is from overseas Crown employment subject to UK Income Tax.

A split year is a tax year where an individual’s residency is split into a UK part and an overseas part. The tax year is classed as a split year and new rules apply for the taxation of certain income.

You can read more about split years in manual RFIG21000.

When to send a Globally Mobile Employee (GME) PAYE notification to HMRC

From 6 April 2025, where an employee meets, or is likely to meet, certain requirements, an employer (or appropriate person) can notify HMRC that they intend to operate PAYE on the proportion of income specified in their notification. This notification is referred to as a GME PAYE notification.

The requirement to make a GME PAYE notification are that the employee works, or is likely to work, both in and outside the UK and either:

• the employee is, or is likely to be, non-UK resident for that tax year

• the tax year is, or is likely to be a split year as respects the employee,

• the employee is, or is likely to be, a qualifying new resident for that tax year,

• employee is, or is likely to be, tax treaty non-resident for a tax year

A GME PAYE notification becomes effective when HMRC have acknowledged receipt of the notification.

The legislation covering the process is set out within sections 690 to section 690E ITEPA 2003.

UK residence is determined by reference to the Statutory Residence Test (SRT).

To make a GME PAYE notification to HMRC to enable you to run PAYE on a proportion of an employee’s income you can go to the notification landing page.

Making uncertain payments – working out if a payment related to UK work or not

There can be circumstances where you may be unable to work out how much of a payment to an employee relates to UK work when it is paid. If this uncertainty is due to the employee having been internationally mobile, then the payment is called an ‘uncertain payment’.

An internationally mobile employee is an employee who works both inside and outside the UK and

• the employee is, or is likely to be non-resident during that tax year, or

• the year is, or is likely to be, a split year for the employee.

When an uncertain payment is made, it is treated as entirely a payment of PAYE income, unless you have notified HMRC that you will treat a proportion of it as not being PAYE income.

You can read more about internationally mobile employees and uncertain payments in manual PAYE81513.

If your employee is eligible for Overseas Workday Relief

If your employee is UK resident for a tax year when they are eligible for Overseas Workday Relief (‘OWR’, also referred to as ‘foreign employment relief’), all of the employment income you pay your employee relating to that tax year will be PAYE income. You can make a GME PAYE notification to HMRC to only operate PAYE on the proportion of employment income paid in that year relating to UK work. You’ll need to tell us the proportion that you’ll treat as non-PAYE income as part of the notification process.

Your employee can claim Overseas Workday Relief on employment income for work performed outside the UK in that year as part of their Self Assessment return at the end of the tax year.

Making notifications for employees who are treaty non-resident in the UK

You can also send a GME PAYE notification for employees who are treaty non-resident in the UK for a tax year, who work wholly or partly outside the UK during that tax year. You can then operate PAYE on the proportion of employment income paid in that year which relates to UK work.

You’ll need to tell us the proportion you’ll treat as non-PAYE income. This is valid as soon as HMRC has acknowledged receipt of the GME PAYE notification.

You can read more about tax treaty non-resident employees in manual PAYE81518.

Making more than one GME PAYE notification because there is a change in circumstances

You can make more than one GME PAYE notification for an employee in a tax year. For example, if the proportion of work that you expect the employee to do outside the UK changes, you can send a new notification to tell us the new proportion.

If something changes for your employee during the year, such as their residence position, you can send a new notification for this. For example, if you think it’s likely that your employee will not be resident in the UK at the beginning of the tax year and you send a notification on this basis, but the employee will be UK resident and eligible for Overseas Workday Relief, you can send a new notification.

Making a GME PAYE notification and HMRC issue a direction

There may be circumstances after you send a notification, where we issue a direction about a revised proportion which is to be treated as not being PAYE income. When this happens, the employer cannot then revise or amend their notification unless the basis on which they made their notification has changed. For example, if you make a notification on the basis that an employee is non-resident and HMRC then issue a direction, you cannot resubmit a notification on the basis that the employee will be non-resident. However, if the employee was found to be resident, then a new notification could be submitted, and this would displace a HMRC direction.

You can only send a GME PAYE notification for one employee at a time, and only for the current tax year. Your notification is valid as soon as HMRC has acknowledged receipt of the notification.

An employee must submit a Self-Assessment tax return at the end of the tax year, even if HMRC have issued a direction.

You can read more about directions issued by HMRC in manual PAYE81521.

When PAYE income is paid after 5 April 2025 that was earned in an earlier tax year

You may make a payment of employment income to an employee after 5 April 2025 which relates to duties they performed in an earlier tax year. The payment is treated as PAYE income on the basis where:

• the employee was non-UK resident

• the employee was UK resident, but qualified for OWR and had elected to be taxed on the remittance basis

• the year was a split year in relation to that employee

This is based on a best estimate that can be reasonably made of the amount of the payment likely to be PAYE income.

Modified PAYE arrangements

There are various modified PAYE arrangements which HMRC can agree with you for globally mobile employees. This depends on you and your employee’s circumstances.

You can read more about modified PAYE arrangements in manual PAYE81900.

Employees who are Short Term Business Visitors from Double Taxation Agreement (DTA) countries

If an employee who is resident in a country which has a DTA with the UK comes to work in the UK and is expected to stay in the UK for 183 days or less in a 12 month period, you may be able to apply for a Short Term Business Visitors arrangement (Appendix 4 arrangement). This means PAYE could be disregarded.

You can read about appendix 4 — criteria for short term business visitors in manual PAYE82000.

Provisional foreign tax credit relief

If an employee works wholly or partly outside the UK, you may have to deduct both PAYE tax and foreign tax from any payment of employment income you make to your employee. You may be able to apply for provisional foreign tax credit relief (Appendix 5 arrangement) for your employee. This means you can set the foreign tax off against UK Income Tax due under PAYE.

You can read more about appendix 5 — net of foreign tax credit relief in manual PAYE82000.

Tax equalisation arrangements

If you employ globally mobile employees who work around the world you can set up tax equalisation arrangements so that that employees get broadly the same take home pay wherever they are employed.

If your employee has a tax equalisation arrangement and works in the UK, you can apply for a tax equalisation arrangement (Appendix 6 arrangement) to operate modified PAYE. This means you can work out PAYE based on the best estimate of all cash earnings and non-cash benefits for the year, grossed up for tax purposes.

You can read more about appendix 6 — modified PAYE in tax equalisation cases in manual PAYE82002.

Short Term Business Visitors from non-Double Taxation Agreement countries

You may be able to operate a Short Term Business Visitors agreement (appendix 8) if the following apply. Your employee is:

• resident in another country

• the UK has a Double Taxation Agreement with the other country

• coming to work in the UK for a UK employer

• working in the UK for 60 days or less.

If you have this arrangement in place, you only need to report and pay PAYE income of employees by 31 May following the end of the relevant tax year if the normal operation of PAYE is considered ‘impracticable.

You can read more about appendix 8 — PAYE special arrangement for short term business visitors (STBV), in manual PAYE81950.