Who qualifies for Overseas Workday Relief?

OWR is available to employees who are UK resident but were not UK resident in any of the three preceding tax years. From 2025/26 onwards, relief applies for the first four tax years of UK residence under the new Foreign Income and Gains (FIG) regime.

How is OWR calculated?

The exempt amount is the proportion of total employment income that relates to overseas working days. The formula is: Exempt amount = Total income × (Overseas days ÷ Total working days). However, if any of that overseas income is remitted (brought) to the UK, the remitted portion becomes taxable.

What counts as a working day for OWR purposes?

A working day for OWR purposes is a day on which you perform more than three hours of substantive work. Days of travel to and from overseas locations may count as overseas working days in some circumstances. Zero-hour days and rest days are generally excluded.

Does OWR still apply from April 2025?

From 6 April 2025, the remittance basis of taxation was replaced by the new Foreign Income and Gains (FIG) regime. OWR continues but is now part of this wider framework. New arrivals to the UK can access a 100% exemption on foreign income and gains for their first four years of UK residence.

What is remittance for OWR purposes?

Remittance broadly means bringing money to the UK or using overseas income for UK purposes, including paying UK debts, using it to purchase goods/services brought to the UK, or transferring it to a UK bank account. The remittance rules are complex and specialist advice is recommended.

How does OWR interact with double taxation treaties?

Double taxation treaties can affect the taxation of employment income in both the UK and the overseas country. In some cases, a treaty may exempt overseas employment income from UK tax entirely, which may be more beneficial than OWR. A comparison should always be made.

What records do I need for an OWR claim?

You should keep detailed records of working days in each country, travel records (boarding passes, hotel receipts), work diaries, employment contracts specifying overseas duties, and evidence of overseas banking arrangements showing income was not remitted to the UK.

Is OWR available in the year you arrive in the UK?

If you arrive in the UK part-way through the tax year and are eligible for split year treatment, OWR may be available from your date of UK arrival if you meet the other qualifying conditions. Specialist advice is important in arrival-year cases.

Are bonuses included in OWR calculations?

Bonuses linked to performance during a period that spans both UK and overseas working days may be apportioned on a day-count basis. The allocation methodology depends on how the bonus is structured and when it is earned. Legal and tax advice should be sought on complex bonus structures.

What happens if I remit more than my exempt amount?

If you remit more than the calculated exempt amount to the UK, the excess is fully taxable as UK employment income. Careful tracking of remittances against exempt income is essential to avoid unexpected tax liabilities.

Overseas Workday Relief Calculator 2025/26

How Overseas Workday Relief Works

Overseas Workday Relief allows qualifying UK residents to exclude from UK taxation the portion of their employment income that relates to days worked outside the UK — provided that overseas income is not brought (remitted) into the UK. The relief is particularly valuable for international executives, finance professionals and mobile workers who regularly travel for work.

The calculation is based on a day-count apportionment. The proportion of your income attributed to overseas duties equals your overseas working days divided by your total working days (UK + overseas). That proportion of your gross employment income is then exempt from UK tax, subject to the critical remittance condition.

The Remittance Condition

OWR income is only exempt to the extent it is not remitted to the UK. If you bring some or all of your overseas income to the UK — for example by transferring it to a UK bank account or using it to pay UK bills — that remitted amount becomes fully taxable as UK employment income. The net exempt amount is: gross OWR exempt amount minus any remitted portion.

Eligibility and Time Limits

From 6 April 2025, OWR is part of the new Foreign Income and Gains (FIG) regime. Relief is available to individuals in their first four tax years of UK residence who were not UK resident in the three years immediately before becoming UK resident. After four years of UK residence, the relief is no longer available and worldwide income becomes taxable on the arising basis.

In 2025/26 transitional rules also apply for those who were already claiming OWR under the old remittance basis system. Specialist tax advice is essential when transitioning between the regimes.

Formula Summary

Overseas proportion = Overseas days ÷ (UK days + Overseas days)
Gross exempt amount = Total income × Overseas proportion
Net exempt = Gross exempt − Remitted overseas income
Taxable income = Total income − Net exempt
Tax saving = Net exempt × Tax rate

Frequently Asked Questions

Overseas Workday Relief (OWR) is a UK tax exemption that allows certain UK resident individuals to exclude from UK taxation the proportion of their employment income that relates to days worked outside the UK, provided that income is not remitted (brought) to the UK.

OWR is available to employees who are UK resident but were not UK resident in any of the three preceding tax years. From 6 April 2025, relief applies under the new Foreign Income and Gains (FIG) regime for the first four tax years of UK residence.

The exempt amount is proportional to overseas working days. Formula: Exempt = Total income × (Overseas days ÷ Total days). However, if any of that overseas income is remitted (brought) to the UK, the remitted portion becomes taxable. The net OWR saving is therefore the remaining unremitted exempt amount times your tax rate.

A working day is a day on which you perform more than three hours of substantive work. Days of travel to overseas locations may count as overseas working days in some circumstances. Rest days and zero-hour days are generally excluded from the working day count.

Yes. From 6 April 2025, OWR continues under the new FIG (Foreign Income and Gains) regime, replacing the old remittance basis. New UK arrivals can access a 100% exemption on foreign income and gains for their first four years of UK residence, and OWR operates within this framework.

Remittance broadly means bringing overseas income or gains to the UK or using it for UK purposes — including paying UK debts, transferring money to a UK bank account, or using it to purchase goods brought to the UK. The remittance rules are complex and professional advice is strongly recommended.

Yes. OWR applies to employment income regardless of whether the employer is UK or overseas-based. What matters is where the employment duties are physically performed, not where the employer is registered.

Double taxation treaties can affect taxation of employment income in both countries. In some cases a treaty may exempt overseas employment income from UK tax entirely, which may be more beneficial than OWR. A careful comparison of treaty relief versus OWR should be made for your specific circumstances.

Keep detailed working day records (diary or timesheet), travel records (boarding passes, hotel receipts), employment contracts specifying overseas duties, overseas bank statements showing income was not remitted to the UK, and any employer split pay arrangements.

If you arrive in the UK part-way through the tax year and qualify for split year treatment, OWR may be available from your arrival date. The conditions must be met for the UK part of the split year. Specialist advice is particularly important in arrival-year cases.

Bonuses linked to performance over a period spanning UK and overseas working days are typically apportioned on a day-count basis using the same methodology as salary. The allocation depends on the bonus structure. Complex arrangements, such as phantom shares or deferred compensation, require bespoke tax analysis.

If you remit more than your OWR exempt amount, the excess becomes fully taxable UK employment income. Careful tracking of overseas income and remittances throughout the year is essential to avoid unexpected tax liabilities on your self-assessment return.