Digital Nomad

Overseas Workday Relief: What Qualifying New Residents Need to Know

From 6 April 2026, UK employers must cap PAYE notifications for Overseas Workday Relief at 30% — discover how this impacts nomads and globally mobile workers.

By NomadicTax Research Team • 5-8 min read • April 24, 2026

## Understanding Overseas Workday Relief (OWR) Overseas Workday Relief is designed for **qualifying new residents** — individuals moving to the UK from abroad but spending some working days overseas. It allows a portion of income earned outside the UK (“non-PAYE earnings”) to be excluded from UK PAYE withholding, easing tax burdens for those with splits in their work locations. ## What Changes From 6 April 2026? - Employers submitting a PAYE notification (formerly known as a **section 690 form**) for employees eligible for OWR must **estimate non-UK, non-PAYE income**, and **ensure it does not exceed 30%** of total earnings. ([gov.uk](https://www.gov.uk/government/publications/employer-bulletin-april-2026/april-2026-issue-of-the-employer-bulletin?utm_source=openai)) - This cap aligns with the maximum relief claimable through the employee’s Self-Assessment tax return and aims to reduce underpayments. ([gov.uk](https://www.gov.uk/government/publications/employer-bulletin-april-2026/april-2026-issue-of-the-employer-bulletin?utm_source=openai)) - Applies from the **2026-2027 tax year onward**, and does **not** apply to employees under transitional provisions. ([gov.uk](https://www.gov.uk/government/publications/employer-bulletin-april-2026/april-2026-issue-of-the-employer-bulletin?utm_source=openai)) ## Implications for Digital Nomads & Globally Mobile Individuals - If you're a digital nomad or frequently working abroad and eligible for OWR, expect that your PAYE obligations will adjust. Your employer must manage notifications cautiously — an estimate over 30% could lead to under-collection or compliance issues. - If your non-UK earnings are likely to exceed that threshold, you’ll want it reflected accurately and anticipate what you’ll pay via Self-Assessment. ## Actionable Advice - Ensure your **employment contract and timesheets** clearly document your work days abroad vs in the UK to support calculations. - Speak with your employer’s payroll or tax department **before April 2026** to confirm how they will apply OWR notifications. - Consult a tax advisor if your non-UK income may vary or if you have transitional status that delays the rule. ## Example Scenario Imagine you earn £100,000 annually, with £40,000 expected to come from work done outside the UK. From 6 April 2026, your employer can notify HMRC that **up to £30,000 (30%)** of your income is non-UK. Anything above that may prompt PAYE on the full amount in practice, even if Self-Assessment later or correctly accounts for overseas work. Ensuring accurate estimation prevents surprises. --- This change reflects HMRC’s efforts to standardize and close gaps in PAYE under­statements — particularly relevant for the growing mobile workforce.