Can I work remotely for a US company while living in another country? Tax, visas and contracts (2026)

Usually, yes. A US company can pay you wherever you live. What changes is everything around the pay cheque: which country taxes it, what you file, and whether your visa lets you work where you're sitting. The answer splits two ways. If you're a US citizen or green-card holder, the US keeps taxing you, and the foreign earned income exclusion is the main relief. If you're not a US person, the US generally doesn't tax work you do outside the US, and the country you live in does.

Both groups then face the same host-country questions: tax residency, the right to work, and whether your home office creates a tax problem for the company.

Everything below comes from IRS, state, immigration and OECD pages, checked on 28 October 2026.

The short version

Track 1: US citizens and green-card holders abroad

You still file a US return

The IRS page for US citizens and resident aliens abroad says the filing rules are generally the same as at home, and that you're "subject to tax on worldwide income from all sources." Moving to Bali, Lisbon or Mexico City doesn't change that.

Two details from Publication 54 catch people out:

• Excluded income still counts for the filing test. For deciding whether you must file, "gross income includes any income that you can exclude as foreign earned income or as a foreign housing amount."
• Freelancers file at US$400. If your net earnings from self-employment are US$400 or more, "you must file a return even if your gross income is below the amount listed for your filing status."

Living abroad gets you an automatic 2-month extension to June 15 for calendar-year filers, and you can ask for 4 more months to October 15. But "you will have to pay interest on any tax not paid by the regular due date."

The foreign earned income exclusion

The IRS figuring page says: "For tax year 2026, the maximum exclusion is $132,900 per person." For 2025 it was US$130,000. If you and your spouse both work abroad and both qualify, each of you can claim it. If you only qualify for part of the year, the cap is pro-rated by your qualifying days. The housing amount limitation is US$39,870 for 2026.

It only covers foreign earned income, which the IRS defines as "income you receive for performing personal services in a foreign country." The client's location doesn't matter: "Where or how you are paid has no effect on the source of the income." So pay from a US company for work you do in Bali can qualify. Pay as a US government employee can't.

To qualify, you need a tax home in a foreign country, which is "the general area of your main place of business, employment, or post of duty". You don't have one for any period your abode is in the US. Then you must pass one of two tests.

The physical presence test suits nomads, because it's "based only on how long you stay in a foreign country or countries." The bona fide residence test suits people who have properly moved, and it allows "brief or temporary trips back to the United States."

You claim the exclusion by attaching Form 2555 to your Form 1040. "Do not submit Form 2555 by itself."

What the exclusion doesn't cover

• Self-employment tax. The IRS page on self-employment tax abroad says you "must take all your self-employment income into account", including income you excluded. The relief here is a totalization agreement, under which social security taxes "are paid only to one country."
• Social security on wages. Publication 54 says US social security and Medicare don't generally apply to work done as an employee outside the US, but one exception is when "You are working for an American employer." A US company keeping you on US payroll will usually keep withholding them.
• Foreign bank accounts. If your foreign accounts total more than US$10,000 at any time in the calendar year, FinCEN says you must file an FBAR.

Your state may still tax you

Leaving the country doesn't automatically end your state tax residency. California treats you as a resident if you're "Domiciled in California, but outside California for a temporary or transitory purpose", and residents are "taxed on all income regardless of source." New York says your domicile "does not change until you can demonstrate with clear and convincing evidence that you have abandoned your New York domicile". It can also treat you as a resident if you keep a permanent place of abode there for substantially all of the year and spend 184 days or more in the state. Other states have their own rules, so check yours before you go.

Track 2: you're not a US person

The US generally doesn't tax your pay

For a nonresident, the IRS sourcing table gives the source of salaries, wages and personal services income as "Where services performed". Work you do from Bangkok for a client in Austin is foreign-source income. Work you do on a trip to the US is US-source.

As a contractor, the company will usually ask you for a Form W-8BEN. The IRS instructions say: "Do not send Form W-8BEN to the IRS. Instead, give it to the person who is requesting it from you." Our W-8BEN guide for non-US freelancers walks through the form, treaty claims and what happens if you don't send one.

Contractor, employee or employer of record

There are three common ways a US company pays someone abroad:

1. Contract. You invoice as a freelancer or through your own company, and you handle your own tax where you live.
2. Employer of record (EOR). A provider employs you through its own local entity, runs local payroll and benefits, and bills the US company.
3. The company's own local entity. Rare for a single hire.

A contract label doesn't settle your status. The IRS contractor or employee page looks at "the extent of the right to direct and control the worker" across three areas: behavioural, financial and the type of relationship. The country you live in has its own test too. In the UK, GOV.UK says a person is self-employed if they "run their business for themselves and take responsibility for its success or failure", and warns that people "may have to pay unpaid tax and penalties" if their status is wrong.

If you'll work like a full-time team member, with set hours, one client and company tools, ask the company about an EOR. Our guide to hiring remote employees internationally compares the main providers and their published prices.

If you're a founder taking US work through your own company, see where to incorporate as a remote founder.

The host-country side: tax residency

Whichever track you're on, the country you live in applies its own residency rules, and they vary:

Sources: GOV.UK, administracion.gob.es and Thailand's Revenue Department.

Day counts aren't the only test. Spain's rule about the centre of your economic interests means you can be resident without the days. Tax treaties can also decide which country taxes your pay. The OECD's 2021 treaty guidance explains that under Article 15 of its Model, wages are taxable only where you're resident unless the "employment is exercised" in the other country, meaning where you're "physically present when performing" the work. For more, read tax residency for remote founders.

The host-country side: your right to work

A tax residency question and an immigration question are different things. Being paid from abroad doesn't mean you're allowed to work where you are. Some countries have visas designed for this:

Sources: Indonesia's eVisa site, the Royal Thai Embassy, Croatia's Ministry of the Interior and Japan's Immigration Services Agency.

Note the Indonesian visa asks for an employment contract with an overseas company. Check the eVisa site before applying if you're a freelancer on client contracts.

Some countries allow limited remote work on a visitor visa. The UK's visitor rules let a visitor "undertake activities relating to their employment overseas remotely from within the UK", as long as "this is not the primary purpose of their visit." Don't assume every country works this way. Our guide to digital nomad visas for founders compares more options.

A visa doesn't settle tax. A nomad visa holder who stays long enough can still become tax resident under the rules above.

The employer's risk: permanent establishment

If you work from home in another country for long enough, your home could become the company's "fixed place of business" there. That's a permanent establishment, and it can mean the company owes tax in your country.

The OECD's 2021 guidance set the old line: a home office "may be a PE for an enterprise if it is used on a continuous basis for carrying on business of that enterprise and the enterprise generally has required the individual to use that location".

On 18 November 2025 the OECD Council approved an update to clarify when a home can be a place of business. The 2025 commentary says:

• Under 50% of your time: a home "would generally not be considered a place of business of the enterprise" if you work from it for less than 50% of your total working time for that enterprise over any twelve-month period.
• 50% or more: it depends on the facts, and "A prominent consideration is whether there is a commercial reason" for you being in that country.
• Commercial reason, yes: the OECD's examples include an employee who regularly visits the company's clients in that country, and one who works from there so customers in other time zones get round-the-clock service.
• Commercial reason, no: an employee who serves clients remotely and only visits a local client once a quarter. "The mere presence of clients" there isn't enough.

This is commentary on a model treaty, not law. Your country's treaty with the US and its local rules decide, and some countries record reservations; Israel, for example, reserves on how it counts the 50% test. If you'll work from one country most of the time, tell the company early. It may prefer an EOR to taking that risk.

Common mistakes

• Assuming moving abroad ends US tax. US citizens and green-card holders still file and are taxed on worldwide income.
• Counting days loosely. The physical presence test needs 330 full days, midnight to midnight.
• Forgetting the state. California and New York can keep treating you as a resident.
• Expecting the exclusion to cut self-employment tax. It doesn't.
• Working on the wrong visa. Check what yours allows. Thailand's DTV and Indonesia's E33G both bar work for local employers or clients.
• Ignoring your new country's tax rules. Days, home and economic ties can make you resident there.
• Keeping it from your employer. Your home office can be their permanent establishment.

Checklist before you move

1. Work out which track you're on: US person, or not.
2. If you're a US person, plan for either 330 full days abroad or a full tax year of bona fide residence, and keep a travel log.
3. Check whether your US state will still treat you as a resident, and what it takes to end that.
4. If you're not a US person, send the company a W-8BEN and make sure your contract says where you do the work.
5. Check the destination's tax residency rules and any tax treaty with your home country.
6. Get a visa that actually allows remote work for a foreign company, from the official immigration site.
7. Tell your employer where you'll be and for how long, and agree whether you'll stay on contract, move to an EOR or stay on payroll.
8. Get advice in both countries before you sign a lease.

Where to go next

Next, read W-8BEN for non-US freelancers, tax residency for remote founders and digital nomad visas for founders. If you'd like to meet other founders and freelancers working for overseas clients from wherever they live, you can join Remote Builders: it's free, and you're in straight away.