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Maximise Your Savings: A Guide to e-Worker Tax Relief in Ireland

12 May by Coffey & Co

According to Statista, Ireland has one of the highest work-from-home rates in Europe alongside Luxembourg and Finland. Some of the industries where hybrid working is common include ICT, finance, and administrative services. The Irish government plans to increase this further.

However, this comes with additional expenses such as increased electricity costs to the employee. With more and more people working from home, the government introduced tax reliefs to shield workers against skyrocketing expenses. That’s what we’ll be looking at in this article.

Costs and Benefits of Working From Home

Working from home (WFH) is where you work from home either on a full-time or part-time basis for a substantial period of time. It’s also referred to as remote working or e-working. 

While it enables you to cut down on transport costs, WFH means spending more on electricity and gas to power work devices and keep the home warm. You also need a stable, fast, and reliable internet connection to stay in touch with your team. These expenses can easily eat into your salary and significantly impact your disposable income. 

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

Financial Support for Remote Workers in Ireland

Remote work can be liberating not only for employees but also the employers. However, with the energy price hikes and the rising costs of living, remote work can be financially punitive to many employees. 

The good news is that there are ways you can make some savings on these rising costs. Here are two ways you can get financial help when working from home:

1.    Employer Tax Relief

The first relief is available directly from your employer. As a remote worker, your employer can pay you up to €3.20 per day (€768 per year) to cover the additional costs of WFH. These allowances aren’t deducted from your Pay As You Earn (PAYE), nor do you have to pay Universal Social Charge (USC) or Pay Related Social Insurance (PRSI) on them. 

The employer can offer to pay higher than €3.20 but this is subject to taxation. You should also note that your employer isn’t under any obligation to offer these allowances. 

2.    Remote Working Relief

You can also claim Remote Working Relief from revenue if you’re an e-worker. It entitles you to tax relief for broadband, electricity, and heating for days when you work from home. The Remote Working Relief rates are 30 per cent for broadband and another 30 per cent for electricity and heating.

Whether self-employed or employed, you can claim relief for the three utilities based on the number of days you worked at home during the year.

You can’t claim Remote Working Relief for days you were on leave, weekends, public holidays, and when you work at home outside of normal working hours. 

Any WFH allowances paid by your employer will also be deducted from your Remote Working Relief claim.

Do I Qualify for Remote Working Relief?

You qualify for Remote Working Relief if you have an arrangement with your employer for WFH, spend substantial periods at home working, and perform substantive work duties at home. This includes logging onto work computer systems, sending and receiving email, data or files, or developing ideas, products and services remotely.

But you can’t claim the relief if you bring work home from the office outside of normal working hours, for example, in the evenings or at weekends.

You can also only claim relief for electricity, heating, and broadband costs. Work items such as office furniture and laptops are not covered under Remote Working Relief.

How to Apply For Remote Working Relief

You can claim Remote Working Relief on the Revenue’s myAccount portal. You’ll need to complete an Income Tax Return and provide vouched evidence of any expenses you’ve paid. For 2023, you can claim Remote Working Relief during the year or after the end of the year. If you claim during the year, you can get real-time credits. 

Do you have any questions about claiming Remote Working Relief? Let us know and we’d be happy to help.

Reach out to us.

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