Remote working has become a familiar part of the ‘new normal’ during the covid years. And while we are hopefully seeing the end of the pandemic, these new ways of working look set to stay. Working from home has brought a welcome flexibility into many people’s roles, but it also comes with its challenges. Space, an increase in household bills, and the need for office equipment may all leave home workers feeling out of pocket. So it is important to know about the tax schemes that have been implemented to help out. At CareerWise, we are experts in all aspects of the world of employment. Here is our guide to tax breaks for those who are working from home in Ireland.
Ireland has one of the highest rates of home working in Europe, with around 22% of employees working remotely (https://switcher.ie/guides/working-from-home-tax-relief/ ) The Irish government is supporting home working, planning to make hybrid working available to everyone in relevant industries by the end of 2022. There are two schemes designed to help employees with the costs and complexities of remote working.
How to define remote working
Although this might seem obvious, in order to know your entitlement, it is important to know the precise definition of your working arrangement. Remote working is where you are required to work at home on a full-time or part-time basis, but it also applies if you are at home part of the time, and spend the remainder of your time in your normal place of work. You should be working for substantial periods outside of the office, logging on remotely, emailing and exchanging information remotely, and providing ideas, products and services remotely, in order to qualify. The schemes discussed here only apply for those who comply with this definition of remote working, not simply those who bring work home outside of normal working hours.
Allowance from your employer
To help cover the additional costs of working from home, your employer may pay you an allowance of up to €3.20 a day, without deducting PAYE, Pay Related Social Insurance, or Universal Social Charge. If your costs are higher, your employer may pay you more, but they will be taxed on any amount they pay you over €3.20. There is no legal obligation for an employer to offer these payments, but they may provide them as an extra benefit. If you are searching for a new job and want to work remotely, it is worth finding out if your potential employer offers a home working allowance to help with your increased household costs.
What you can claim for
If your employer does not pay you for your additional costs, you can claim Remote Working Relief. This scheme is designed to help with the additional costs incurred by your household if you are working from home. You can use it to claim for the cost of electricity and heat. From 2022, you can claim for up to 30% of your energy bills, calculated from the number of days worked from home over the course of the year. You can also claim 30% of the cost of your broadband connection, once again calculated based on the number of days you work from home. However, any amounts paid to you by your employer to help cover these costs must be deducted from your claim.
How to calculate your claim
You can only claim for the number of days you worked from home, so you first need to work out how many days this was. You cannot include public holidays, weekends, annual leave, or any days that you chose to work outside your normal hours.
Once you know how many days you are going to claim for, multiply your bill by the number of days. Then divide it by the number of days in the year (365, except in a leap year when it is 366, and 2020 was a leap year!) Then multiply by 0.3 (30%).
If your broadband is provided as part of a bundle, or you live with other people who split the bills, things get a little more complicated. But you can still claim!
Although many people purchase their broadband as part of a bundle that also includes television and a phone line, many suppliers provide a breakdown of costs. If you have this, simply use the amount that your supplier tells you is the cost of your broadband alone. If you cannot obtain a breakdown of the bundle cost, Revenue will accept a fair estimate – so if your bundle covers broadband, phone, and television, splitting the bill in thirds would be a reasonable suggestion. You can then claim your 30% of this amount.
Similarly, if you split your household bills with the other people you live with, you can claim based on the amount you have paid. So if you pay 50% of the bill, you can claim 30% of that 50%.
Are you looking for a remote working job in Ireland?
CareerWise is Ireland’s leading specialist recruitment firm, based in Cork, Shannon and Galway, and we can help you to find your ideal new job in Ireland. Many of our roles feature a hybrid element. We specialise in the Engineering, Supply Chain, Science/Pharma, IT and Accounting industries in Ireland, and we look forward to working with you. Contact us online now or call us on +353 (0) 21 206 1900 to arrange a consultation.
CareerWise is Ireland’s leading specialist recruitment firm, based in Cork, Shannon and Galway, and we can help you to find your ideal new employees. We specialize in the Engineering, Supply Chain, Science/Pharma, IT and Accounting industries in Ireland, and we look forward to working with you. Contact us online now or call us on +353 (0) 21 206 1900 to arrange a consultation.
Mike Morrissey has extensive knowledge of production, quality and engineering, having worked for Dell, Creative Labs and Tyco Safety Products /Sensormatic.
His expansive operational experience is grounded with training as a Six Sigma Black Belt.
As a lead auditor, he is very familiar with compliance and quality standards and has project managed the implementation of the environmental standard ISO14001. He has successfully utilised his project management and team leading skills in implementing numerous cost-saving and process improvement projects.
Since joining CareerWise Recruitment, Mike has graduated with a Diploma in Personnel Management from UCC and is a Chartered member of the CIPD.
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