Working Remotely for a US or EU Company: Contracts, Hours and Holidays
Before you sign with a US or EU company: contract types, working hours across time zones, holidays, leave, equipment and getting paid.
Landing a remote job with a foreign company is exciting, but the details of the arrangement matter as much as the salary. Contract type, working hours, holidays and payment terms all affect your day-to-day life and your long-term security. Here's what to understand and check before you sign.
Contract types and what they mean for you#
Employee through an employer of record (EOR)#
An EOR legally employs you in your country on the foreign company's behalf. You get a local employment contract, payslips, and the benefits and protections local employment law requires. See employer of record explained.
Good for: stability, benefits and simpler taxes.
Independent contractor#
You provide services under a contract, send invoices and are paid per month, hour or project. You're usually responsible for your own taxes, and you don't automatically get paid leave, retirement contributions or health insurance.
Good for: flexibility and sometimes a higher headline rate. But compare it fairly: a contractor rate needs to cover benefits you'd otherwise get as an employee. See how to compare job offers and how to set your rate as a remote developer.
Employed by a local company, working for a foreign client#
You're a regular employee of a local company that has the foreign client relationship. Your rights come from your local employment contract.
What to check in the contract#
- Who your legal employer or client is, and which country's law governs the contract.
- Pay: amount, currency, frequency, and how exactly you'll be paid.
- Who pays transfer fees and currency conversion costs.
- Working hours and overlap expectations, in writing.
- Leave: paid time off, sick leave, and which public holidays apply.
- Notice period for both sides, and what happens during probation.
- Equipment: who provides the laptop, and who owns it.
- Intellectual property and confidentiality clauses. Make sure they cover work for this company, not everything you ever create, including personal side projects.
- Non-compete clauses: what you're restricted from doing during and after the contract.
If something is unclear, ask for it to be clarified in writing before signing. For larger or unusual contracts, a short review by a lawyer is worth the cost.
Working hours across time zones#
Sri Lanka is UTC+5:30. That means:
- Europe: UK and Central European working hours start in the early-to-mid afternoon in Sri Lanka, so a shifted day (say noon to 9 pm) gives good overlap.
- US East Coast: working hours fall in Sri Lanka's late evening and night, so full overlap means night work. Many teams agree on a few hours of overlap instead.
- US West Coast: even further apart; overlap is very limited without night work.
The difference changes during the year because Europe and the US use daylight saving time and Sri Lanka does not.
Agree on clear expectations: how many overlap hours, which meetings you must attend, and how quickly you're expected to reply. Regular work through the night is hard to sustain, so negotiate a schedule you can keep for years, not weeks.
Public holidays and leave#
Clarify:
- Which public holidays you get off: Sri Lankan holidays, the company's country holidays, or a fixed number of days to use flexibly.
- How much paid leave you get, and how to request it.
- How the team covers when you're away, and vice versa.
Put your planned leave in the team calendar early. Remote teams appreciate predictability.
Your home office#
- Internet: a primary connection plus a mobile backup.
- Power: a UPS for your router and a plan for longer power cuts.
- Ergonomics: a proper chair and screen height. Back problems are a common cost of remote work.
- A quiet space for calls.
Ask whether the company offers an equipment or internet allowance; many remote companies do.
Getting paid#
Depending on the arrangement, you might be paid through EOR payroll, a contractor platform, a service like Payoneer or Wise, or a direct bank transfer. Compare the fees and exchange rates, and keep records of every payment. Contractors should send proper invoices; see how to invoice international clients.
Tax treatment of foreign income depends on current local law and can change. Check with the Inland Revenue Department or a qualified tax adviser.
Making it work long term#
- Over-communicate in writing: daily or weekly updates, clear pull-request descriptions, documented decisions.
- Protect your boundaries: set working hours and turn off notifications outside them.
- Stay visible: share your work in team channels and keep regular one-on-ones with your manager.
- Build relationships: remote work can be isolating, so join communities like c/remote-work and talk to people doing the same thing.
Key takeaways#
- Understand whether you're an employee (often through an EOR) or a contractor, and what that means for benefits and taxes.
- Read the contract carefully, especially pay, fees, hours, leave, IP and notice terms.
- Agree on realistic overlap hours that you can sustain.
- Set up reliable internet, power and a healthy workspace.
- Check tax rules with official sources and keep good records.