Remote working can be liberating for many employees in Ireland – but working from home can also raise the cost of your energy bills. By claiming working from home tax credits, you can make some savings on these rising costs.
Those struggling with the cost-of-living squeeze can claim tax relief on their electricity, heating and broadband bills immediately for their home-working days, rather than having to wait until the end of the year.
If a worker’s employer does not pay them a €3.20 a day tax-free allowance that is permitted by Revenue to cover expenses, they are entitled to get money back from their taxes.
With power and heating expenses skyrocketing in recent months, people who work from home are feeling the pinch on their utility bills. Fortunately, you can now receive a portion of the expenses back through remote working tax credits.
CONTENTS
Do I Qualify for The Working from Home Tax Credit?
Options for Claiming Working from Home Tax Allowance
What Expenses Can E-Workers Claim?
Calculation for Remote Working Relief in Ireland
Steps To Claim WFH Tax Relief
Do I Qualify for The Working from Home Tax Credit?
Working from home or remote working is also called ‘E-working’. E-working is characterised or defined as working for substantial amounts of time outside your normal place of work by completing the below duties:
- Working remotely from your home to send/receive work related files or emails.
- Accessing your work desktop remotely
- Providing your work services from a remote location e.g. customer phone service, client meetings via online
- Working in agreement with your employer who has agreed to the working from home situation
- You must be required to complete duties which are considered essential and perform them from home
Options for Claiming Working from Home Tax Allowance
There are two ways to get your tax refunded if you work from home.
- Your employer may choose to reimburse you for your expenses with a tax-free contribution of up to €3.20 each workday without deducting it from your PRSI, PAYE and USC, or
- Claim it back as part of your annual tax rebate if your employer does not reimburse you.
If your employer doesn’t cover your expenses, you can still claim tax relief. Irish Tax Rebates can guide you through the process, as this relief allows you to recover some of the taxes you’ve already paid. For shared bills, the cost is divided among the bill-payers based on how much each person has contributed.
What Expenses Can E-Workers Claim?
If your employer does not compensate you, you can claim back 30% on the following costs:
- Electricitry
- Heating
- Broadband
Rather than claiming against the overall annual value of these utility costs, your remote working claim must be proportionate to the number of days you worked from home.
As your utility expenses continue to rise, so will the size of your tax rebate.
Calculation for Remote Working Relief in Ireland
Let’s calculate tax relief for utility costs (electricity, heating, and broadband) if someone worked from home for 200 days in 2023, with the following annual expenses:
- Electricity & heating: €1,500
- Broadband: €800
- (1500 + 800) = 2300
- 2300 * 200/365 = 1260
- 1260 * 30% = €378
On this basis, the value of the credit is €378 in remote working tax relief for the year. Revenue then awards 20% + 40% of this, depending on if you are on the higher or lower rate of tax.
Steps To Claim Working From Home Tax Relief
- Identify how many days you worked from home last year.
- Calculate your annual electricity, heating, and broadband bills.
- Fill out our 60-second form, and Irish Tax Rebates will take care of the rest.
Claim Working from Home Tax Relief Today!
Irish Tax Rebates has over 20 years of experience in the tax rebate industry and has over 320,000 customers in Ireland. Our staff of tax accountants are very knowledgeable about the tax system and can help you claim the maximum amount of tax you are entitled to.
Existing customers: Apply for Working from Home Relief today.
New Customers: Apply here.
Remote Working Relief FAQs
1. How to calculate your allowable remote working costs?
To estimate your eligible expenses for remote work, use the following method:
- Add up the total cost of your electricity, heating, and internet for the year.
- Multiply this by the number of days you worked from home.
- Divide that by 365 (or 366 for leap years).
- Then, multiply the result by 30% to calculate your eligible expenses.
2. What expenses are not covered by the working from home tax relief?
Under Irish tax law, certain expenses are not covered by the working from home tax relief. These include costs such as mortgage repayments, rent, and the purchase of office furniture or equipment. While you can claim for a portion of utility bills like electricity, heating, and broadband, any personal expenses, like food or entertainment, also fall outside the scope of this tax relief.
3. Do I have to pay tax on equipment from my employer?
If your employer provides equipment for work purposes, such as laptops or phones, and they are necessary for your job, you generally don’t have to pay tax on them. However, if the equipment is used for personal reasons, it could be considered a taxable benefit-in-kind (BIK), and you may be liable for tax on that personal use. Employers are responsible for determining the extent of personal use and reporting any applicable BIK to Revenue.
4. How are eligible workdays calculated for working-from-home relief?
Only days worked at home count. Exclude weekends, public holidays, annual leave, and sick days.
5. If I’ve worked from home in previous years, can I claim backdated relief?
You can claim for past years, but employers cannot backdate payments like the €3.20 daily allowance.
