As thousands of workers across Ireland are currently working from home due to the Covid-19 outbreak, some may not be aware of their entitlement of e-worker tax relief. E-worker relief is a tax relief on expenses which people may incur while working from home.
E-working is characterised as working for substantial amounts of time outside one’s normal place of work. According to Revenue, this includes:
- at home on a full- or part-time basis
- part-time at home and the remainder at the normal place of work.
eWorking is defined by Revenue as including:
- logging onto a work computer remotely
- sending and receiving email, data or files remotely
- developing ideas, products and services remotely.
These arrangements only apply to e-worker employees and not to workers who bring additional work home outside of normal working hours.
Revenue permits an employer to make payments of up to €3.20 per day to employees who satisfy the conditions for the relief, without deducting PAYE, PRSI, or USC. However, this is not a legal obligation on the employer. Where employees do not receive this payment, the good news is that those employees can still claim back tax on a range of expenses incurred on them, including heating, electricity, broadband etc.
However, these expenses should be ‘reasonable’ as there are personal uses of items like utilities. So, it is important to keep in mind that one can only claim for the proportion of costs that relate to the time working from home, not the total cost of such expenses for the duration of Covid-19 crisis. Any refund of those expenses will be based on the portion of overall expenses which relate to actual time working from home.
Calculations for e-worker tax relief
Simply calculate total costs and the amount of time (as a percentage) spent working from home per day. You can then claim the tax break on this percentage of the cost.
Where an employer does pay the €3.20 tax-free amount to an employee and costs exceed the amount, it is still possible to claim tax-relief on the balance.
Making a claim
To make a claim, you must submit receipts to your local Revenue office using MyEnquiries available through MyAccount.
Full details are available on Revenue.ie.