If you are based in the UK and your employees are working abroad there are slightly rule surrounding PAYE and NIC depending on where your employees are working and how long you expect them to work there.
Calculating PAYE for employees working abroad
You calculate and deduct PAYE tax from all salary payments made to employees who work aboard. When your employee goes to work abroad, you must give them a written letter stating:
· the date they went abroad to work
· their gross pay from the start of the tax year to the date they went abroad
· the tax deducted from the start of the tax year to the date they went abroad
If your employee spends over a period of a year or more working abroad you may be able to obtain full UK tax relief on their earnings. To do this complete form P85 and send it to the HMRC.
If your employee is on an overseas contract, it’s possible that the tax authorities in the overseas country will want to make tax deductions from your employee’s income.