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Working From Home – Tax Reliefs

From Home Heating Oil to Toilet Paper and everything in between, we’ll all have noticed our consumption and home costs have increased as a result of working from home in the pandemic.  With a return to workplaces unlikely in the short term, perhaps it is time to revisit the options available for employers and employees.

On the employer side, your employer can pay up to €3.20 per day to an employee tax free.  This payment is effectively to cover those additional costs of working from home.  Whilst not sounding like much, this equates to over €700 for a full working year.

It is important to note that the €3.20 must be in addition to your normal salary.  An employee can’t take a pay cut and be paid this in lieu.  Likewise, the €3.20 is the maximum daily amount.  An employer can pay a lower amount, tax free.  However, any amount paid over €3.20 per day will be taxed.

We can obviously see the benefit for an employee.  Is there a cost to an employer?  Arguably there isn’t, in that I appreciate that most employers are continuing to rent or own their premises, but the overhead costs of offices or units will clearly be lower when staff are working from home, i.e. heating oil and toilet paper!

Alternatively, where an employer does not pay you an allowance, or pays you less than €3.20 a day, an employee can personally claim Remote Working Relief.  You can claim for:

  • 10% of the cost of electricity and heat, by reference to the number of days worked at home over the year, and
  • 30% of the cost of broadband, again by reference to the number of days worked at home in the year.

A claim for Remote Working Relief for 2020 should be included on your Income Tax return, which can be submitted via ROS or MyAccount.  Additional information on each of these tax reliefs can be found at – Working From Home