The Rise of Workations: Managing Remote Work Expenses
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Today, we can work nearly wherever we want and how we think we can manage our workload: Remote work and flexible working have become the standard rather than the exception. More employees prioritise work-life balance with rethinking how and where they work. That’s what we nowadays call workcation: A growing trend that blends professional responsibilities with travel, allowing employees to work anywhere while enjoying a change of scenery.
The pandemic accelerated this shift, normalising working from home and proving that productivity is no longer tied to a fixed office. It may be a beachside co-working space, a mountain retreat, or a cultural city break. The rise of workcations is reshaping the modern work environment.
This demand for greater autonomy over where they work has become especially popular among Gen Z, digital-first professionals, and digital nomads looking for more fulfilling work experiences.
Even if this trend brings advantages for companies, such as improved job satisfaction and employee retention, it still creates new financial and legal challenges, particularly around travel expenses, employment law, and tax compliance across different jurisdictions.
Let’s find out together how companies can embrace workcations while staying in control of their budgets.
Key expense challenges with workations
While workcations offer employees the chance to work from inspiring locations, they also bring financial complexities to finance teams: Remote workers balancing travel with professional duties create challenges in expense management. It’s crucial to distinguish between business and personal expenses, manage currency fluctuations, and ensure compliance with company policies. Addressing these issues requires clear work policies, real-time expense tracking, and automated expense management solutions to avoid overspending and policy violations.
Business-related vs. personal costs
One of the biggest financial challenges with successful workcations is defining what qualifies as a business expense and what is a personal cost. Traditional business trips have well-established reimbursement rules, but workcations blur the lines. Should a company cover an employee’s extended hotel stay if they arrive a few days early for personal travel? If they upgrade their accommodation for a better Wi-Fi connection, does that count as a business need?
To prevent disputes, companies should set clear reimbursement guidelines outlining which expenses are covered while excluding personal travel costs and luxury upgrades. Per diem allowances can also help standardise meal spending and daily expenses, ensuring fairness across employees.
Country-specific differences
International workcations introduce additional challenges, particularly around currency fluctuations and tax implications. Employees working from different locations may submit expenses in multiple currencies, making real-time exchange rate adjustments essential for accurate reimbursements.
Beyond currency differences, tax regulations vary significantly by country. Some nations allow VAT recovery on business expenses, while others impose strict employment law requirements when employees work there for extended periods. Without automated systems that track location-based tax rules, businesses risk non-compliance, unexpected tax liabilities, and potential legal consequences.
Ensuring compliance
Traditional expense policies were designed for office-based employees or short-term business trips. Still, they often don’t account for the hybrid work model or employees working from a different time zone. If an employee submits an expense claim for a co-working space or a mobile internet connection, should it be approved?
Companies need automated compliance monitoring that also allows some flexibility for different working arrangements to ensure that all expense approvals align with internal policies. AI-driven tools can further help finance teams flag out-of-policy claims, streamline approvals, and enforce real-time compliance checks, reducing manual intervention while controlling spending.
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Setting clear expense policies for workations
Workcations seem to be here to stay. This means that companies need to set clear expense policies to manage costs, ensure compliance, and maintain fairness. Finance teams risk inconsistent claims, disputes, and rising expenses without well-defined rules. A solid policy should outline reimbursable travel and accommodation costs, set daily allowances, and use automation to streamline approvals.
While business trips follow strict reimbursement rules, workcations introduce grey areas. Companies should define covered expenses that align with corporate travel policies—for example, economy-class flights or standard hotels. By setting boundaries upfront, businesses avoid disputes and keep expense approvals consistent.
But workcation-related expenses extend beyond flights and hotels. Companies should establish per diem allowances to manage daily spending on meals and incidental costs, ensuring fair and predictable reimbursements. Policies must also clarify Wi-Fi and mobile hotspot coverage, as reliable internet is essential for productivity. Co-working spaces offer structured work environments but should be covered under fixed memberships or workday allowances rather than open-ended reimbursements. Transport rules should specify public transit for commuting while excluding rental cars.
When it all comes together, manually reviewing every workcation expense is inefficient and prone to errors. Automation can streamline this process by categorising expenses, applying real-time policy checks, and flagging out-of-policy claims before they reach finance teams. In addition to using modern corporate cards, AI-driven currency conversion and location-based tax adjustments ensure compliance with global policies while reducing errors.
Tax and legal considerations for workations
Unlike traditional business travel, workcations introduce complexities around employee presence in different jurisdictions. Businesses risk tax exposure, compliance issues, and legal penalties without proper oversight. Companies must track employee locations, understand local tax regulations, and implement structured policies to mitigate this.
One of the most significant challenges is determining the tax liabilities of remote workers operating across multiple jurisdictions. The risk increases if employees negotiate contracts, generate revenue, or perform key business functions while abroad.
To manage these risks, companies must establish clear protocols for tracking employee locations and ensuring compliance with local tax laws. The best approach is implementing automated tracking solutions that monitor employee movements without relying on manual reporting. Some companies use AI-driven tools that integrate with HR and expense management systems to flag potential tax exposure when employees spend extended periods in a different jurisdiction. This proactive approach ensures that finance and legal teams can assess risks in real time and take necessary action proactively.
Ultimately, tax and legal compliance should be a priority when structuring remote work policies. Companies that take a proactive approach—leveraging automation, setting clear rules, and monitoring employee locations—can support flexible work arrangements while minimising financial and legal exposure.
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How Yokoy can help simplify workation expense management
Yokoy’s AI-powered spend management platform streamlines the entire process, ensuring real-time categorisation, automated compliance, and seamless integrations to keep workcation expenses under control.
Let’s take a look:
Faster categorisation and approvals
Workcation expenses often fall into a grey area, making it difficult for finance teams to classify claims correctly. With AI-powered categorisation, Yokoy automatically assigns expenses to the right category—whether accommodation, meals, transportation, or remote work essentials—reducing manual workload and preventing misclassified claims.
The platform also applies real-time approval workflows, ensuring expenses align with company policies before processing. Finance teams can set predefined rules for workcation-related spending, allowing the system to flag, approve, or escalate claims as needed. This significantly accelerates reimbursement times and eliminates unnecessary delays.
Virtual and corporate card solutions
Reimbursement delays can frustrate employees, making them feel like their workcation is a burden. Yokoy’s virtual and corporate card solutions provide a seamless alternative by allowing employees to pay directly with company-issued credit or visa cards. These virtual cards can be pre-configured with spending limits and category restrictions. Since all transactions are automatically logged in Yokoy, your finance team gains visibility into spending in real-time, reducing administrative burdens and preventing policy breaches.
Automated compliance checks
Ensuring compliance with company expense policies is critical, especially for workcations where personal and business expenses overlap. Yokoy’s automated compliance monitoring continuously checks each transaction against company policies, flagging claims that exceed set limits or fall outside approved spending categories. If an employee submits an expense that violates company rules—such as a non-business-related upgrade or an out-of-policy expense—the system can request justification, block the claim, or escalate it for further review. This automation reduces the need for manual audits and ensures that all expenses align with your organisation’s internal policies before processing.
Country-specific controls
Yokoy’s country-specific controls allow your company to enforce location-based expense policies and automatically adjust for per diem allowances, tax rates, and local regulations. Multi-currency transactions are handled seamlessly, ensuring that employees are reimbursed accurately while finance teams maintain control over international expenses. This feature helps your company comply with tax laws in different regions, avoiding unnecessary liabilities or regulatory issues.
Seamless integration
Managing travel-related expenses manually can be cumbersome, mainly when employees use different booking methods. Yokoy offers seamless integration with travel booking platforms like TravelPerk, allowing employees to book flights, accommodation, and transport within a pre-approved system. This ensures that all workcation-related expenses align with your company’s travel policies from the get-go. With real-time syncing, finance teams gain complete visibility over travel costs, making monitoring and controlling workcation expenses easier without adding complexity.
Next steps
Managing expenses for remote work and workcations doesn’t have to be complicated. With AI-powered automation, real-time approvals, and seamless compliance checks, Yokoy helps finance teams stay in control while giving employees the necessary flexibility.
Book a demo today to see how Yokoy can streamline your company’s expense management and ensure full compliance.
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