Are you an Remote Worker? If so, you may qualify for Remote Working Tax Relief.
If you’ve been asked to work from home then you have two options when it comes to claiming tax relief towards additional heating, electrical and broadband home expenses.
1. Your employer may pay you Flat Rate remote worker expenses as an allowance,
2. If your employer doesn’t pay you Flat Rate remote worker expenses then you can claim towards your actual remote working expenses.
Revenue have specific rules on what remote working is.
remote working includes:
- working at home either on a full-time or part-time basis; or
- working some of the time at home and the remainder in the office.
remote working involves:
- logging onto the employer’s computer system remotely;
- sending and receiving email, data or files remotely;
- developing ideas, products and services remotely.
Do you satisfy the conditions?
- You and your employer must have formally agreed that you are required to work from home;
- You are required to perform substantive duties of the employment at home; and
- you are required to work for substantial periods at home.
1. Payment of Remote Working Flat Rate Expenses by your employer
- As the name ‘Flat Rate’ suggests, this amount is a ‘fixed rate’ already agreed by Revenue.
- Revenue allows an employer to make payments up to €3.20 per day to employees who satisfy the above conditions for the relief.
- Flat Rate remote working expenses are paid tax free therefore, your employer won’t deduct PAYE, PRSI, or USC.
- Your employer may ask you to complete a Flat Rate claim form. Your employer should keep a record of Flat Rate payments made.
2. Where your employer doesn’t pay the Remote Working Rate Expenses.
Please note that if you’ve not paid any Tax / USC in the year, then you cannot get any tax back.
- You can claim tax relief for your remote working expenses – utility bills such as light, heat, telephone & broadband.
- You must satisfy the conditions of a remote worker and the utility bills must be necessary for you to work remotely.
- You can claim the tax relief yourself (via myAccount) providing employer hasn’t paid you the Remote Working Flat Rate payment (€3.20 per day).
- However, if your employer has paid you Remote Working Flat Rate payments, you may still have a claim but you will have to deduct payments received from your calculation below (Step 3).
- You can claim your Remote Working Tax Relief for 2020 in 2021.
- Keep your utility bills and details of days worked in case Revenue ever request them.
2.1 How to calculate e-Working Expenses
|Step 1||Add up all relevant bills for the year||(figures are for illustration purposes only)|
|Electricity bills||€ 1,500|
|Heating bills||€ 1,200|
|Total L&H||€ 2,700|
|Daily Rate - L&H||( €2,700 /365 days)||€ 7.40 per day|
|Total Broadband||€ 600|
|Daily Rate - Broadband||( €600 /365 days)||€ 1.64 per day|
|Step 2||Add up the number of days you worked as an e-Worker|
|6 months |
(26 weeks x 5 days per week)
|Step 3||Revenue allow 10% of L&H|
|L&H||130 days x 7.40|
= € 962 X 10%
|Revenue allow 30% of Broadband|
|Broadband||130 days x 1.64|
= € 213 X 30%
|Total eWorking expenses allowed||€160|
|If you pay 40% tax, you could get €64 tax back.|
|If you pay 20% tax, you could get €32 tax back|
2.2 Claiming my Remote Working expenses
- Sign in to myAccount
- [If you’ve not registered your ‘myAccount’, then you can follow Step 1 in my blog ‘Free guide on how to claim tax back in Ireland‘]
- click PAYE Services,
- click on ‘Review Your Tax 2017-2020’
- select the Tax Year
- Statement of Liability ‘Request’
- click on ‘Complete Income Tax Return’
- click Next in the Personal details page (if details are correct)
- click Next in the PAYE income page (ensure your income amounts are correct)
- click Next in the Non-PAYE income page
- ‘Your Job’ in the ‘Tax Credits & Reliefs‘ page
- ‘Remote Working Relief’ and complete the following details
- Were you in receipt of up to € 3.20 per day from your employer? Y/N
- L&H paid – enter the amount from your 10% calculation
- Broadband – enter the amount from your 30% calculation
- Number of days working remotely?
- Tick boxes – for any other tax credits you wish to claim for the year
- Click Next
- When you are happy with the figures, tick the declaration and submit the form
For full details on claiming health expenses you can check out my blog ‘How to claim tax back on health expenses’
For full details on Remote Working you can read Revenue’s guidance