Tax relief and working from home in Ireland

Remote working in Ireland

At the last count, 22% of employees work from home in Ireland if they have a job that warrants it. It’s one of the highest work from home rates in Europe.

To try and increase this further, the Irish government plans to make hybrid working available to everyone in relevant industries by 2022. Hybrid working is where you split your time between the workplace and working remotely. Some examples of relevant industries include:

• Administrative and support services
• Information & communication
• Finance, insurance & real estate

What is the National Remote Work Strategy?

It’s the government’s plan to increase remote working in Ireland. Under the National Remote Work Strategy:

• your employer will be unable to decline a request to work from home without good reason
• public service workers will be encouraged to spend 20% of their working week away from the office

Revenue.ie defines remote working as when you are required to work either

1. at home on a full-time or part-time basis or
2. split working hours between home and your normal place of work

Allowances for remote working don’t apply when you bring work home outside of normal working hours.

Costs and benefits of working from home

Working remotely enables you to cut the cost of travel and transport, but it also means spending more on gas and electricity to heat your home and power your devices.

A fast reliable broadband connection is vital for many jobs and is required to stay in touch with colleagues which can also add to expenses.

Fortunately, there’s financial support available to workers in the form of tax relief and allowances.

Financial support for working from home

There are two ways you can get financial help for working at home.

1. An allowance paid by your employer: Your workplace may provide you with a remote working allowance to cover the costs of remote working.
2. Remote Working Relief: If your employer does not contribute or you’re self-employed you can claim at the end of the year.

Here’s an overview of the allowances and tax relief you’re entitled to from your employer or directly from Revenue.ie.

1. Working from home allowance paid by your employer

If you’re a remote worker or work at home some of the time, your employer can pay you up to €3.20 per day without deducting PAYE to cover the additional costs of working from home. You won’t have to pay Universal Social Charge (USC) or Pay Related Social Insurance (PRSI) either.

Employers are not legally obliged to make this payment, but can offer it as an extra benefit to their staff.

If your additional costs are higher than €3.20 your employer can pay you more, but any extra payments will be taxed and PRSI and USC deducted.

2. Remote working relief

If you don’t get working from home allowance from your employer, you can claim Remote Working Relief from Revenue.ie.

You could get tax relief on your electricity, heating and broadband for the days you spend working from home if you claim expenses directly from Revenue.ie. The current rates are:

• 10% for electricity & energy
• 30% for broadband

In this year’s budget, the Government announced that tax relief on 30% of electricity, heating and broadband expenses will be given for all days spent working from home from January 2022.

What expenses can you claim?

From January 2022 if you work remotely either as an employee or self-employed you can claim for various utilities based on the number of days you worked at home during the year.

• 30% of the cost of electricity and heat
• 30% of the cost of broadband

You can only claim for the days you worked from home, so you can’t claim for:

• days taken as annual leave
• weekends or public holidays that you wouldn’t normally work
• work at home outside of normal working hours

Any amounts paid by your employer must be deducted from your claim.

How working remote working relief is calculated

An example of the calculation for utility costs:

1. multiply your bill by the number of days you worked remotely
2. divided by 365 (days of the year)
3. multiply by 0.3 (30%) or 0.1 (10%) (tax relief given)

Note: From January 2022 energy and broadband costs will both be calculated at 30%.

So, if your gas and electricity bill is €1,200 and your broadband costs €600 and you worked from home for 150 days in 2022, your tax relief calculation will be:

Electricity & heating

€1200 x 150 days = 180,000
180,000 / 365 days = 493
€493 x 0.30 = €147

Broadband

€600 x 150 days = 90,000
90,000 / 365 = 246
€246 x 0.30 = €74

On this basis, you could be eligible to claim tax back on total expenses of €221.

In terms of what you get back in your pocket, if you pay a tax rate of 20% you’ll qualify for €44 or if you pay the higher rate of 40% you’ll qualify for €88.

What if you pay for broadband in a bundle?

Your broadband may be supplied as part of a package or bundle, for example with TV and home phone.

If a breakdown is given by your supplier, you can claim 30% of this amount but if not Revenue is willing to accept a reasonable portion of the bundle price as your broadband costs.

What if you share gas and electricity bills with someone else?

If energy bills are shared between two or more people, the relief will be apportioned and calculated based on the amount you pay.

For example, if you pay half of your household bills, instead of calculating £500 for electricity x 150 days, you’d calculate £250 x 150 days.

How to apply for Remote Working Relief

To claim Remote Working Relief, you’ll have to complete an Income Tax Return and provide vouched evidence of any expenses you’ve paid.

If you are claiming for 2020 or 2021 you will need to upload receipts and images of bills paid via the Revenue myAccount page. To find out in more detail how to claim for 2021 and previous years, visit Revenue.ie Remotely working from home.

Other ways to save money when working from home

Extra heating for your home, running office equipment and even putting the kettle on several times a day can all add to your energy bills. You may also need a faster, more reliable connection to cope with video conferencing and file exchange which could mean higher broadband costs.

We’ve put together several guides to help you cut the cost of working from home.

• Top energy saving tips: Simple ways to cut your usage, reduce your household bills and save the planet.
• Who are the cheapest gas and electricity suppliers?: Find out this month’s cheapest energy supplier in Ireland.
• How to find the cheapest home heating oil: How to get hold of the cheapest heating oil in Ireland.
• How to make your home more energy efficient: Tips on grants, loans and changes you can make to your home to cut energy bills.
• How to check broadband availability in your area: Find out what broadband providers, prices and speeds are offered where you live.
• How to switch broadband providers: Thinking of changing to a cheaper, faster broadband provider? This page will guide you through the switching process.