Financial support while working from home

With last week’s extension of Government recommendations to stop the spread of COVID-19, many workers will now find themselves looking at working from home on a long-term basis. Those new to remote working may not be aware of the supports available to them, as they incur the costs of working from home. In this blog, we will introduce the supports available for eWorkers, and how you can apply and make use of these supports while working from home. 

Support for eWorkers 

Working from home brings with it a number of additional costs for which provisions have been made to cover additional expenses, such as the essentials of electricity, broadband and heating. Employers can make a payment of up to €3.20 per workday to an eWorker employee to cover additional costs incurred, without deducting PAYE, PRSI and USC. In cases where the amount to be reimbursed exceeds the €3.20 per day mark, this payment should be taxed. Employees may also reclaim tax on the difference between the €3.20 and actual costs. Employers are not legally obligated to make this payment. 

eWorking, according to Revenue, is a method of working where the work-related activity that is undertaken by the employee is not bound to a specific location. It involves working at home on a full- or part-time basis, or working partly at home and working the remainder of time in the normal place of work. eWorking, for the purposes of this support, involves:

  • Logging on to a work computer remotely; 
  • Receiving or sending of emails, data or files remotely;
  • Development of ideas, products and services remotely.

However, eWorking does not cover occasions where an employee may choose to bring their work home outside of their normal work hours, such as in the evenings or over weekends. 

If the employer cannot cover this subsidy, their employee can claim tax back on the expenses incurred. Home-workers, or eWorkers, will need to provide evidence to Revenue to avail of this support. This evidence may be in the form of receipts, or a letter from their employer stating that they are indeed working from home and are not receiving reimbursement for expenses incurred during this time. In cases where employees claim tax back on their expenses while eWorking, the allowance will take into account the balance between personal and professional use of resources and utilities, and the fact that any rebate will aso benefit everyone else in the home. As such, the refund received will be based on a portion of the overall expenses and not the total amount.

How to claim e-Working expenses 

If your employer does not make a payment covering expenses incurred whilst eWorking,  you are not entitled to claim the round sum of €3.20 per working day. You may claim deductions in respect of your actual vouched expenses which are incurred wholly, exclusively and necessarily in the performance of the duties of your employment. This claim can be made by completing an Income Tax return, which is found in myAcccount on the Revenue website. The key steps in this process are: 

  • Click on the ‘Review your tax’ link under PAYE services
  • Select the Income Tax return for the relevant tax year
  • In the Tax Credits and Reliefs section, click on the Other PAYE Expenses option
  • In the Amount Claimed section, enter the amount of expense

All documentation relating to a claim should be kept for six years from the end of the tax year to which the claim relates. 

Other supports 

Provisions also exist for additional expenses, including:

Work calls are considered a business expenditure, and therefore are tax deductible. Where you cannot make a calculation between your private and business calls, Revenue will accept that 10% of your mobile costs are for business purposes. 

Where an employee is using their private laptop or computer for business, depreciation of the technology is compensated through the wear and tear allowance, a rate of 12.5% annually over 8 years. Revenue accepts that 10% of total usage is for business use only, as with mobile phone costs. Assets covered under the wear and tear allowance must be in use at the end of the tax year. 

Should you need guidance or advice on how to best approach these matters for your own business or employees, we at CDS Law & Tax would be happy to help. Please do not hesitate to contact us at the usual phone numbers, Cork 021 235 5810 and Tralee 066 716 9033, or email info@cdslaw.ie