Working from Home Tax Relief Tips 2024

Introduction

Working from home, also known as remote working or e-working, can make you eligible for working from home tax relief. If you work from home for substantial periods, either full-time or part-time, you may be able to claim tax relief on the extra costs incurred, such as electricity, heating, and broadband.

The cost of items you buy, such as office equipment, is not eligible for working from home tax relief. You can apply for the tax relief after the end of the tax year or during the year. You can do this online with revenue using their MyAccount service or by contacting our team.

Qualifying For Working from Home Tax Relief

To qualify for working from home tax relief, you must have an arrangement with your employer to work from home, and you must be required to perform substantive duties at home for a substantial period of time.

Allowance paid to you by your employer

If you are a remote worker, your employer may pay you up to €3.20 per day without deducting Income Tax, Pay Related Social Insurance (PRSI), and Universal Social Charge (USC). This payment is to cover the additional costs of working from home, such as electricity, heating, and broadband.

Your additional costs might be higher than €3.20. Your employer may pay these higher costs; however, any amount more than €3.20 per day paid by your employer will be taxed. If you claim working from home tax relief, any payment by your employer for remote working expenses must be deducted from your claim.

Costs You Can Claim

If your employer does not make a payment of €3.20 per day or pays you less than your allowable costs, you can claim working from home tax relief with the relief given at your highest rate of tax.

• For 2020 and 2021: You can attribute 10% of the cost of electricity and heating to remote working. Apportionment is based on the number of days worked from home over the year. Additionally, 30% of the broadband use to remote working. Apportionment is based on the number of days worked from home over the year. Any amounts paid by your employer must be deducted from your claim.

• For 2022 and subsequent years: You can attribute 30% of the cost of electricity, heating, and broadband to remote working. Apportionment is based on the number of days worked from home over the year.

Calculation for 2020 and 2021

To calculate your electricity and heating remote working costs:

• Multiply your allowable utility bills by the number of remote working days.
• Divide by 365 (when calculating relief for 2020, divide by 366).
• Multiply by 10% (0.1).

To calculate your broadband remote working cost:

• Multiply your bill by the number of remote working days.
• Divide by 365 (when calculating relief for 2020, divide by 366).
• Multiply by 30% (0.3).

Calculation for 2022 and subsequent years

Your relief is calculated using the formula ((A x B) ÷ C – D) x 30%, where:

• (A) is your allowable utility bills for electricity, heating, and broadband.
• (B) is your number of remote working days.
• (C) is the number of days in the relevant year of assessment.
• (D) is any remote working allowance reimbursed by your employer.

The relief is given at your highest rate of tax.

Tip 1: Records and Documentation

You must be able to account for each expense you intend to claim. This means keeping a record of all receipts and bills. The Revenue Commissioners provide an online receipt tracker for this. Alternatively, you should keep documents for 6 years from the end of the tax year that the claim is for.

Tip 2: Equipment Provided By Your Employer

If your employer gives you equipment that you need to do your work, like a computer or printer, and you mainly use it for work, it is not considered a benefit-in-kind. This means that you do not have to pay any tax for getting the equipment from your employer. Additional information and guidance for working remotely can be found on the Department of Enterprise, Trade & Employment website.

Tip 3: Capital Gains Tax (CGT)

If you use only part of your home for e-working, it does not affect exemption from Capital Gains Tax if you sell it as your principal private residence. For further information, please see the Revenues page on the Principal Private Residence.

Tip 4: Local Property Tax (LPT)

You will not receive a reduction on Local Property Tax (LPT) due if you use a room in your home to carry out work-related activities.

Tip 5: Right to Request Flexible Working and Right to Request Remote Working

The Workplace Relations Commission (WRC) has prepared a Code of Practice for Employers and Employees on the Right to Request Flexible Working and the Right to Request Remote Working. A copy of the code of practice can be found here.

Conclusion

Many employees can benefit from the reliefs available for working from home, which can result in a tax refund for the employee if processed correctly. It is very important for employees to make themselves aware of their entitlements and, where necessary, to seek professional advice on this subject.

Contacts

For further advice and information, contact:

• Anytime Tax Refunds Limited
  • Website: AnytimeTaxRefunds
  • Phone: 071-9328980, 087-6641455
  • Email: info@anytimetaxrefunds.ie
• Revenue: www.revenue.ie
• Citizens Information: www.citizensinformation.ie
• Legal Aid Board: www.legalaidboard.ie
• Department of Enterprise Trade and Employment: https://enterprise.gov.ie/en/
• Workplace Relations Commission: https://www.workplacerelations.ie/en/

Frequently Asked Questions (FAQ)

1. Can everyone claim working from home tax back? Who is not eligible? No, not every employee can claim working from home tax relief. You will only be eligible for the allowance if you work at home and pay for your utility bills yourself.

2. Can directors claim this tax relief? Directors who work in the business can also claim this working from home tax relief.

3. Does working from home tax relief apply to equipment? Employers often provide equipment to their employees to enable them to carry out their duties at home. As long as the employee’s private use of such equipment is minimal, it is not seen as a benefit-in-kind. If an employee chooses to purchase equipment themselves, this is not an allowable deduction, even if it is used for work-related activities.