Tax Tips

Tax Relief When Working from Home – How to Claim Your Tax Rebate

According to a Eurofound Living, working and COVID-19 report, Ireland has one of the highest rates of employees now working from home across the whole of Europe.

This means that there’s more Irish taxpayer’s than ever eligible to claim Revenue’s eWorking tax relief, which is a special a tax rebate you can claim if you’re working from home.

The tax rebate allows you to claim money back on expenses such as broadband, phone, light, and heating – essentially utilities and costs that will be greater if your work is now based at home either some of the time, or all of the time.

We’ve outlined some information below that will help you understand if you’re eligible to claim this tax relief, how much you could earn, and how you can secure the maximum rebate possible.

If you’re already up to speed and you’d like to get started with your application, apply for your tax rebate here.

Do you qualify for the Work From Home tax relief?

To qualify for this allowance, there should be a formal agreement in place between the employer and the employee to work from home, the employee must be required to perform substantive duties of the employment at home, and an employee must be required to work for substantial periods at home.

In our experience, the majority of people who are now working from home as a result of the pandemic do satisfy these conditions and therefore are eligible to make a claim. If you only started working from home in 2020, you will need to wait until January 2021 to claim this rebate.

How do you claim this tax back?

There are two ways:

  • Your employer can choose to make a contribution of €3.20 per workday tax free to you as reimbursement for your costs.*
  • You can claim this tax back yourself as part of your annual tax rebate, if your employer does not reimburse you for your costs.

If your employer does not reimburse you for your expense or pay the €3.20 per day, Revenue allows 10% of your Electricity and Heat cost and 30% of your Broadband cost.

It’s important to note that these costs are apportioned based on the number of days worked from home over the year, and if the expense is shared by two or more people, this cost must be apportioned based on the amount paid by each individual.

*It’s far more beneficial for both employees and employers to make the tax free payment of €3.20 per workday tax free, rather than an employee claiming the expenses themselves. This is due to the % allowable of the additional expenses incurred by an employee being relatively low – it would be rare that the total received by an employee claiming the tax relief on their expenses incurred would outweigh the employer paying the €3.20 per workday.

Examples of Work From Home tax rebates:

Although it’s more beneficial for your employer to make the payment, even if your employer doesn’t do this you should still apply for your tax rebate yourself. In our experience, most employers are leaving it up to employees to claim this rebate themselves, particularly those who have had little experience of working from home arrangements prior to 2020.

We have outlined some examples of both situations below:

Daniel worked from home for 111 days in 2020.

 His annual heating/electricity cost is €2,020 and broadband cost is €480. Total apportioned expenses for lighting, heating, and broadband is €105.

  • If Daniel claims the tax relief himself, he will receive a tax rebate of €21 as he pays tax at the rate of 20%.
  • If Daniel’s employer paid him €3.20 x 111 days tax free he would receive an additional amount in his net pay of €355.20.
  • Daniel’s employer also stands to make savings. If Daniel’s employer reduced his gross pay by €355.20 and pay a tax free e-worker payment of the same amount, they would have a tax saving of €71.04.

Ruth worked from home for 200 days in 2020.

Her annual heating/electricity cost is €2,020 and broadband cost is €480. Total apportioned expenses for lighting, heating, and broadband is €190. As Ruth lives in shared accommodation with 2 other people her expenses are split 3 ways reducing her allowable expenses to €63.

  • If Ruth claims the tax relief herself, she will receive a tax rebate of €25 as he pays tax at the rate of 40%.
  • If Ruth’s employer paid her €3.20 x 200 days tax free he would receive an additional amount in his net pay of €640.
  • Ruth’s employer can also make savings they reduce her gross pay by €640 and pay a tax free e-worker payment of the same amount, they would have a tax saving of €256.

My employer doesn’t reimburse me, how can I claim this tax rebate myself?

If you are eligible for claim this tax relief and your employer isn’t reimbursing you, we can help you claim this rebate and ensure you’re getting as much money back as possible.

To get started, simply apply for your tax rebate here. We will make a full assessment of all taxes you have paid and any reliefs, credits, or overpaid tax that is owed to you, including the eWorker tax allowance. Please make sure you have your Electricity, Heating and Broadbands bills available to support your claim, as proof of expenses is required by Revenue and we will be in touch to gather these from you.

Claim your tax back

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