Working from home tax relief explained

When employees work from home, their expenses are likely to increase due to additional use of electricity, heating, telephone, and internet. If you work from home (also called e-working or remote working), or did during the pandemic, you may be eligible for some tax relief. In this article, you’ll learn what working from home tax relief is, if you’re eligible, and how you can claim it.

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Tax relief, sometimes known as a tax allowance or deduction, is a way to reduce the amount of income you’re taxed on. Instead of paying tax on all your earnings, Revenue may take certain costs or situations into account and lower the portion of your income that’s subject to income tax.

There are different types of tax relief in Ireland, including:

• Medical expenses
• Work from home tax credit
• Tax credit for single person child carers
• Tax reliefs for over 65s

Working from home tax relief, sometimes known as WFH tax relief, is offered to employees who are asked to work from home by their employers. You might see these employees referred to as e-workers.

If your employer does not offer a working from home allowance, you can claim remote working relief on costs at the following rates:

• For 2024, you can claim the tax relief during the year or after the end of the year. If you claim during the year, you can get real-time credits. This means that you can claim for working from home expenses when you pay them and get increased tax credits in your subsequent payroll payments from your employer
• From 2022, 30% for electricity, heating, and internet costs
• For 2021, 30% for internet costs and 10% for electricity and heating costs

To be eligible for work from home relief, you must be carrying out your work at home. This means you must be able to show that your home is your workplace. Revenue will accept that your home is a workplace if you are performing substantive duties from your home, and these duties must be related to your current work. These include:

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

You won’t be able to claim working from home tax relief if you work outside of your home, for example if you’re visiting clients and then just complete some tasks at home.

Since 2024, employees in Ireland have the legal right to request remote working. While employers don’t have to approve every request, they must consider it and respond appropriately. This law reflects how common remote work has become and shows why tax relief for working from home is more relevant than ever.

As an e-worker, you can only claim expenses that are in direct relation to remote working. These include the electricity, heating, and broadband you use during your working hours.

There are two ways you can claim when working from home:

1. A working from home allowance from your employer
2. Tax relief for home workers

Your employer can pay you up to €3.20 a day as an allowance towards your working from home expenses. This allowance is free from tax, Pay Related Social Insurance (PRSI), and Universal Social Charge (USC). Your employer may choose to pay more than €3.20 per day to cover expenses, but you will pay tax, PRSI, and USC as normal on that extra amount.

Should your employer choose not to cover your extra expenses, you can claim tax relief at the end of the tax year (1st January to 31st December). This calculation is made by apportioning the number of days in the year that you worked from home and multiplying that figure by 30%.

Note that if you share these types of expenses with someone else, the amount you can receive in tax relief is based on your share of the bill rather than the whole bill. You can only claim for the days that you were working from your home in your normal working hours.

For 2022 and subsequent tax years, to calculate the amount of costs you can get tax relief on for your electricity, heating, and internet costs:

1. Add your electricity, heating, and internet costs and multiply the total costs by the number of days worked at home
2. Divide by 365 (or the number of days in the year you are claiming for)
3. Subtract any remote working allowance you already received from your employer
4. Multiply by 30% (0.3)

When you have the figure, you can calculate your tax savings – you will get tax relief on the amount of your costs at a rate of 20% or 40% (whichever is the rate of income tax you pay).

If you’re a PAYE employee, you can claim working from home tax relief using myAccount, Revenue’s online service for PAYE taxpayers.

Remote workers can either claim in real time during the year or after the year ends.

1. Claim during the year

The advantage of claiming back the costs of working from home as you go is that you see the tax benefit reflected in your payslip. Here are the steps:

1. Sign in to myAccount (you may have to create an account first).
2. Go to the ‘PAYE Services’ section and select ‘Receipts Tracker’.
3. Upload clear images and receipts of your utility bills.
4. Revenue will use this to adjust your tax credits in real time.

2. Claim after the end of the year

You can also claim Remote Working Relief after the year ends through your income tax return. Just log in to myAccount, review your tax for the year, and complete the return. In the ‘Your Job’ section, select ‘Remote Working Relief’, enter your utility expenses, upload receipts, and submit.

You can find more information on Revenue’s page on how to claim Remote Working Relief. Alternatively, read more about how to file a tax return in Ireland.

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