Remote work compensation is the set of rules a company uses to pay and reward people who work from home or another location: how base salary is set (by location or not), which allowances and equipment cover home-working costs, and how benefits, tax and social security change when people work away from the office. In Europe, that last part is not optional: several countries set their own rules for home-office expenses, and cross-border remote work can change where salaries are taxed.
This guide covers the pay models, 2026 allowance rules in six countries, cross-border risks, benefits redesign and what pay transparency changes. It also includes TalentUp data on 25,000 job ads published in 2026: how often employers advertise remote or hybrid work by country, how rarely they mention an allowance, and whether remote ads post higher salaries.
Key takeaways
- Hybrid, not fully remote, is the European norm: 15.8% of 2026 job ads in TalentUp’s sample explicitly offer hybrid work and only 2.2% fully remote.
- Choose a pay model per role family: location-based, location-agnostic or tiered, and document it.
- Remote-work allowances are a country-by-country question: from €2.45 a day tax-free in the Netherlands to a legal duty to compensate expenses in Spain and Portugal.
- Only 2.6% of remote or hybrid ads mention an allowance, but 13.6% do in the Netherlands.
- Cross-border remote work can shift income tax, social security and permanent establishment exposure, so set rules before saying yes.
- Under pay transparency laws, location is a pay criterion like any other: it must be objective, gender-neutral and documented.
How Remote and Hybrid Work Change Pay
Remote work changes compensation in three ways. First, it widens the labour market a role competes in: a backend developer hired remotely from Lisbon may be compared with offers from Berlin or Amsterdam. Second, it moves costs from employer to employee (energy, internet, a desk, a chair) and from commuting to home working. Third, it adds legal complexity, because pay, allowances, tax and social security follow the place where the work is done.
Official data shows the scale. In 2025, 8.8% of employed people aged 15–64 in the EU usually worked from home and 14.2% sometimes did, while 77.0% never did (Eurostat). The share is much higher in the Netherlands (41.0% sometimes), Sweden (32.1%) and Ireland (19.2% usually), and much lower in Italy (91.8% never).
So for most employers the real question is not “what do we pay remote workers?”, but how hybrid and remote options fit into one pay and benefits policy that also covers on-site roles. For the working-time side (right to disconnect, flexible hours, time recording), see how to adapt flexible working policies to regulatory changes.
Remote and Hybrid Work in 2026 Job Ads: TalentUp Data
28.5%
of job ads mention a remote, hybrid or home-office option
15.8%
explicitly offer hybrid work, versus 2.2% fully remote
13.6%
of Dutch remote/hybrid ads mention a home-office allowance, versus 1.2% in the other ten countries
+14.3%
median posted salary for fully remote UK software roles versus ads with no remote option
Source: TalentUp job postings database, January–September 2026, about 25,100 sampled employee job ads in 11 European countries.
We analysed a random sample of about 25,100 employee job ads published between January and September 2026. 71.5% do not mention any remote or home-working option, which does not always mean the job is on-site, but shows that most employers still do not advertise flexibility.
| Country |
Hybrid |
Fully remote |
Remote option, model not specified |
Any remote or hybrid option |
Ads sampled |
| Poland |
24.5% |
6.6% |
17.0% |
48.1% |
~1,050 |
| Portugal |
28.3% |
4.8% |
10.6% |
43.7% |
~2,610 |
| Spain |
19.5% |
4.3% |
12.0% |
35.7% |
~2,380 |
| Netherlands |
17.3% |
0.6% |
11.0% |
28.8% |
~2,720 |
| Germany |
9.1% |
0.7% |
18.0% |
27.8% |
~2,350 |
| Ireland |
20.7% |
1.7% |
5.1% |
27.5% |
~2,430 |
| United Kingdom |
18.4% |
2.2% |
5.2% |
25.7% |
~2,370 |
| Italy |
10.1% |
3.3% |
11.5% |
24.9% |
~2,430 |
| Belgium |
11.0% |
0.6% |
9.7% |
21.4% |
~1,430 |
| France |
9.3% |
0.9% |
10.3% |
20.5% |
~2,760 |
| Sweden |
8.9% |
0.7% |
7.8% |
17.4% |
~2,530 |
| All 11 countries |
15.8% |
2.2% |
10.4% |
28.5% |
~25,100 |
Three patterns stand out:
- Southern and Central Europe advertise flexibility most. Poland, Portugal and Spain lead, with fully remote offers above 4%. Remote work is a recruiting argument in markets that hire for international employers.
- Germany talks about “Homeoffice” without a model. 18.0% of German ads mention home office or mobile work without saying hybrid or fully remote, for example “mobiles Arbeiten nach Absprache” (mobile work by arrangement).
- Advertised flexibility is not the same as practice. Sweden and the Netherlands have high home-working rates in Eurostat data but lower rates in job ads, possibly because flexibility there is a company-wide norm rather than something stated in each vacancy.
Allowances are rarely advertised, except in the Netherlands
Only 0.7% of all ads, and 2.6% of ads that mention remote or hybrid work, refer to a remote-work allowance, home-office budget or equivalent. The Netherlands is the exception: 3.9% of all Dutch ads and 13.6% of Dutch remote or hybrid ads mention a thuiswerkvergoeding, often next to the travel allowance, sometimes with the amount (for example €2.45 per day). Among remote or hybrid ads, Belgium (3.3%) and France (2.7%) follow at a distance; elsewhere the rate is about 1% or lower.
Do remote job ads pay more?
Ads with a posted annual salary allow a like-for-like comparison for a few roles where the sample is large enough. These are medians of posted salaries in EUR, after removing duplicate reposts.
| Role and country |
Fully remote |
Hybrid |
No remote option mentioned |
| Software developers, United Kingdom |
€91,700 (n≈110) |
€86,000 (n≈490) |
€80,200 (n≈310) |
| Software developers, Spain |
€50,000 (n≈230) |
€45,000 (n≈410) |
€45,000 (n≈650) |
| Software developers, France |
small sample |
€55,000 (n≈250) |
€55,000 (n≈170) |
| Accountants, United Kingdom |
small sample |
€55,000 (n≈270) |
€51,800 (n≈420) |
| Project managers, United Kingdom |
small sample |
€66,300 (n≈200) |
€63,500 (n≈310) |
Fully remote software ads post 14.3% more in the UK and 11.1% more in Spain than ads without a remote option; hybrid ads are equal or slightly higher. This is not a remote “premium” for the same job: fully remote ads skew towards senior roles and international employers that pay above local market. But it does show that remote does not mean cheaper in the ads candidates actually see.
Pay Models for Remote Employees
A remote employee pay policy usually follows one of three models. Our guide on location-based pay vs the same salary everywhere covers the pros and cons in depth; this is the short version.
| Model |
How it works |
Works best for |
Main risk |
| Location-based |
Pay follows the local market where the employee lives, often via city or country tiers |
Companies hiring across countries with very different pay levels |
Pay drops when people move; harder to explain |
| Location-agnostic |
One range per role, regardless of location (often anchored to a reference market) |
Small, fully remote teams; very scarce skills |
Overpays in low-cost markets or fails to compete in high-cost hubs |
| Tiered / hybrid |
A few pay zones (e.g. 3–4 tiers) or national ranges with a cap |
Most European employers with hybrid teams |
Tier boundaries must be justified and reviewed |
Practical rules that hold whatever model you choose:
- Decide per role family, not per person. On-site and customer-facing roles stay local; remote-portable roles (engineering, product, some finance roles) can sit on national or regional ranges.
- Write down what happens when someone moves. Pay for existing employees generally cannot be reduced unilaterally; in Germany, for instance, a location-based reduction needs a new agreement and, where there is a works council, its co-determination (CMS).
- Benchmark each location with current data. To build country and city ranges, see salary benchmarking for international companies and our methodology.
For a sense of the spread: TalentUp benchmarks for a Backend Developer in June 2026 placed gross annual base salary at about €35,400 in Warsaw, €45,700 in Lisbon, €63,800 in Dublin and €70,700 in Berlin. A single “remote rate” across that range overpays in one market or underpays in another.
Remote Work Allowances and Equipment by Country
A remote work allowance compensates home-working costs: energy, internet, furniture and equipment. Whether it is mandatory, and how much can be paid free of tax and contributions, depends on the country.
| Country |
Is the employer obliged to pay? |
Tax/contribution-free amount in 2026 |
Notes |
| Spain |
Yes, for regular remote work (at least 30% of working time over three months) under Ley 10/2021 |
No statutory flat rate; set by agreement or collective agreement |
The remote work agreement must list equipment and expenses and how they are compensated |
| Portugal |
Yes, additional teleworking expenses must be compensated (Labour Code, art. 168) |
Up to €1 per full telework day (€0.10 electricity, €0.40 internet, €0.50 computer); +50% if set by collective agreement |
Only where the employer does not provide those goods, and under a written telework agreement |
| France |
No telework-specific duty; professional expenses are generally borne by the employer |
€2.70 per telework day, max. €59.40 per month; €3.30 and €72.60 with a collective agreement |
Above these limits the excess must be justified as real expenses (URSSAF) |
| Belgium |
No general duty |
€160.99 per month office allowance from 1 March 2026 (indexed periodically) |
For structural, regular telework (about one day a week or more); separate small internet and PC allowances possible |
| Netherlands |
No |
€2.45 per home-working day (thuiswerkvergoeding) |
Not combinable with a tax-free travel allowance on the same day |
| Germany |
No general duty |
Employee claims the Homeoffice-Pauschale: €6 per day, max. €1,260 a year (210 days) |
Employer cash allowances are normally taxable wages; IT equipment provided for private use is tax-free |
How to turn this into a policy:
- Start from the legal minimum in Spain and Portugal and record the amount in each remote work agreement.
- Use the tax-free ceilings as a design anchor in France, Belgium and the Netherlands: allowances above them cost more and must be justified.
- Provide equipment instead of cash where it is more efficient, for example laptops, screens and chairs, and specify who owns and returns them.
- Separate home-office costs from pay. An allowance is an expense reimbursement, not salary, so do not use it to close a pay gap.
Cross-Border Remote Work: Tax, Social Security and PE Risk
“Work from anywhere” becomes complicated when “anywhere” is another country. Three exposures change at once.
| Area |
Default rule |
What changes with remote work |
| Income tax |
Salary is generally taxable where the work is physically performed (OECD Model, art. 15) |
The 183-day exemption only applies if the employer is not resident there and the cost is not borne by a local establishment |
| Social security |
Within the EU/EEA/Switzerland, one country’s system applies (Regulation 883/2004); working 25% or more in the country of residence usually moves contributions there |
Under the Framework Agreement on cross-border telework (in force since 1 July 2023), habitual telework of under 50% in the residence country can stay in the employer’s country, if both countries signed and an Article 16 request is filed |
| Corporate tax |
A home office can be a fixed place of business |
The 2025 OECD Commentary update says a home office used for less than 50% of working time over 12 months is generally not a permanent establishment; above that, a “commercial reason” test applies |
What a sound policy includes:
- A list of allowed countries (often only where you have an entity or an employer of record) and a cap on days worked abroad per year.
- An approval process that checks tax, social security (A1 certificate) and immigration before someone relocates.
- A rule for pay after relocation: under a location-based model, moving to a lower-cost country may change the range for new pay decisions, but not unilaterally reduce existing pay.
Redesigning Benefits for Hybrid Teams
Hybrid work benefits are not office perks moved online. Free lunch, parking and an on-site gym lose value when people come in two days a week, while costs at home rise. Common adjustments:
- Flexible benefit budgets or menus that employees can spend on what fits their working pattern (see why benefits are a crucial part of compensation).
- Meal vouchers on remote days. In Spain, the €11 daily tax exemption for meal vouchers also applies to telework days (LIRPF art. 42.3.a). In France, teleworkers have the same rights as office-based employees (Labour Code art. L1222-9), so check that meal vouchers and other benefits are not tied to office presence.
- Coworking access for people who cannot work well from home, often as a monthly budget.
- Wellbeing and health: mental health support, ergonomic assessments and health insurance that work across countries. Our guide to holistic wellbeing in compensation and benefits covers how to prioritise.
- Learning and connection: travel budgets for team offsites and development budgets to replace informal learning in the office.
Remote Pay Under the EU Pay Transparency Directive
The EU Pay Transparency Directive (2023/970) had a transposition deadline of 7 June 2026; its obligations apply through national laws once each member state has transposed it. It does not ban location-based pay, but it changes how you must handle it:
- Location must be an objective, documented criterion. Pay structures must rest on objective, gender-neutral criteria, and employees can ask for the criteria used to set their pay and pay progression.
- Job ads need a pay range for each location. Candidates must receive initial pay or its range before the interview; a remote role open in several countries may need a range per country or tier (see how to post a job offer under the Directive).
- Remote arrangements can hide gender gaps. If more women work remotely and remote roles sit in lower tiers, a location rule can create an indirect pay gap. Check it in your pay equity audit.
- Reporting and burden of proof. Employers with 250+ workers report gender pay gaps yearly from 7 June 2027, 150–249 workers every three years from 2027, and 100–149 every three years from 7 June 2031. An unexplained gap of 5% or more not remedied within six months triggers a joint pay assessment, and in discrimination claims the burden of proof shifts to the employer.
Build location into your compensation philosophy and see our pay transparency resources.
Building a Remote Work Compensation Policy: Checklist
- Define eligibility for remote, hybrid and on-site work by role family.
- Choose a pay model (location-based, location-agnostic or tiered) and write down the reasons.
- Set ranges per location or tier with current market data and review them at least yearly.
- Set allowances and equipment per country, at least meeting legal duties and using tax-free ceilings.
- Adapt benefits for hybrid patterns: flexible budgets, meal vouchers, coworking, wellbeing.
- Write cross-border rules: allowed countries, day limits, approval and A1 process.
- Document relocation rules and get works council input where required.
- Test for pay equity: compare pay by gender within each location tier and work pattern.
- Communicate it: publish ranges in job ads and explain the location logic internally.
For country and city salary data to set ranges, see TalentUp’s European Salary Benchmark Report and plans.
Sources
- TalentUp. Job postings database, January–September 2026: random sample of about 25,100 employee job ads in 11 European countries, plus samples of ads with posted salaries (see methodology above). Backend Developer salary benchmarks retrieved 18 June 2026.
- Eurostat. Employed persons working from home as a percentage of the total employment (lfsa_ehomp), 2025, ages 15–64.
- European Union. Directive (EU) 2023/970 on pay transparency. EUR-Lex.
- European Union. Regulation (EC) No 883/2004 on the coordination of social security systems. EUR-Lex.
- Framework Agreement on the application of Article 16(1) of Regulation (EC) No 883/2004 in cases of habitual cross-border telework (1 July 2023).
- EY. OECD releases 2025 update to the Model Tax Convention (home office and permanent establishment).
- Spain. Ley 10/2021, de 9 de julio, de trabajo a distancia and Ley 35/2006 del IRPF, art. 42.3.a. BOE.
- Portugal. Portaria n.º 292-A/2023 (telework expense limits). Portal das Finanças.
- France. URSSAF, Télétravail: frais professionnels.
- Belgium. KPMG, Social security instructions Q1 2026 (home office allowance).
- Netherlands. Belastingdienst, Tarieven, bedragen en percentages loonheffingen vanaf 1 januari 2026.
- Germany. Einkommensteuergesetz §4 (5) Nr. 6c and §3 Nr. 45; CMS, Salary cut when working from home: a US model for companies in Germany?