E-working and tax relief

Introduction

E-working (also known as home working or remote working) is where you work from home for substantial periods on a full- or part-time basis.

You may be able to claim tax relief on the additional costs of working from home, including electricity, heat and broadband.

This document provides practical information and advice on tax relief for e-working.

COVID-19 and e-working

The COVID-19 emergency has had a big impact on working life in Ireland. Throughout the country organisations are asking staff where possible to work from home to prevent the spread of the virus.

If you have been asked to work from home because of the COVID-19 emergency, you may be able to claim tax relief against the cost of home expenses.

Budget 2021

It was announced in Budget 2021 that the following expenses will be covered as an allowable home expense for e-working tax relief:

  • Cost of broadband
  • Other vouched expenses where they are “wholly, exclusively and necessarily” part of your work

You can only claim for these expenses if your employer does not already make payment towards the expense. More information will be available from Revenue shortly.

How do I know if I qualify?

E-working is where you work from home for substantial periods on a full- or part-time basis.

To qualify as an e-worker, you must:

  • Have a formal agreement with your employer that you are required to work from home
  • Be required to perform essential duties of employment at home

E-working involves:

  • Working for substantial periods at home
  • Logging onto a work computer remotely
  • Sending and receiving email, data or files remotely
  • Developing ideas, products and services remotely

You are not entitled to claim tax relief if you bring work home from the office outside of normal working hours, for example in the evenings or at weekends.

More information on the eligibility criteria is available in Revenue’s Tax and Duty manual (pdf).

I am a cross border worker, am I eligible?

If you are a cross border or frontier worker employed in the Republic of Ireland and normally resident in Northern Ireland, and you meet the other eligibility criteria, you can also claim tax relief on e-working.

How much can I claim?

You may have extra costs when you are working from home including heating, electricity and broadband costs. Your employer can pay you a contribution towards these costs or you can make a claim for tax relief at the end of the year.

If your employer pays you an allowance towards these expenses, you can get up to €3.20 per day without paying any tax, PRSI or USC on it. If your employer pays more than €3.20 per day to cover expenses, you pay tax, PRSI and USC as normal on the amount above €3.20. You should note that employers are not legally obliged to make this payment to their employees.

If your employer does not pay you an allowance for your expenses, you can make a claim for tax relief at the end of the year. You will get money back from the taxes you paid.

Your refund of tax is based on:

  • How many days you worked from home
  • The cost of the expenses
  • Revenue’s agreed rate for calculating the cost of running a home office

Revenue’s rate for the cost of running a home office is 10% of the total cost. This means that you can claim 10% of the total amount of allowable utility bills against your taxes. This is only available for the days that you work from home. This does not include times you may have brought work home to do outside your normal working hours.

If your employer pays you an allowance towards your expenses, the amount paid is deducted from the amount you can claim back from Revenue.

Example

Mary works from home for 6 months while her office is closed due to the COVID-19 emergency. During that 6 months her household bills for heating, electricity and broadband come to €1000. At the end of the year she can claim tax back on expenses of €100 (10% of €1000).

The amount she gets back depends on her rate of tax. If she pays tax at the higher tax rate of 40% she will get €40 back from her taxes (40% of €100). If she pays tax at the lower rate of 20%, she will receive €20 back (20% of €100).

What expenses can I claim?

Tax relief on e-working covers the additional costs of working from home. This includes:

  • Heating
  • Electricity
  • Broadband
  • Other vouched expenses where they are “wholly, exclusively and necessarily” part of your work

Should I pay tax on equipment from my 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 receiving the equipment from your employer.

Capital Gains Tax

If you use only part of your home for e-working, your home remains your Principal Private Residence and you are not liable for CGT when you sell it.

You can get more information from Revenue.

How to apply

You can claim tax relief online using Revenue’s myAccount service. You can also access the myAccount service on mobile and tablet devices using Revenue’s RevApp.

To complete an Income Tax return online use the following steps:

  1. Sign into myAccount
  2. Click on ‘Review your tax’ link in PAYE Services
  3. Select the Income Tax return for the relevant tax year
  4. Select ‘Other PAYE Expenses’ in the ‘Tax Credits and Reliefs’ page and insert the amount of expense at the ‘Amount Claimed’ section

You must be able to account for each expense you intend to claim. This means keeping a record of all receipts and bills. You should keep all documentation relating to your claim for 6 years from the end of the tax year to which the claim relates.

You may also need a letter from your employer stating that you work from home.
Page edited: 14 October 2020