Remote working relief in Ireland: What’s the allowance and how can you claim it?

If you work from home in Ireland, you may be eligible for remote working relief (also called working from home tax relief) on expenses such as heating and broadband. In this article, you’ll learn all about working from home relief, your eligibility, and how to claim your tax back or get tax credits.

Tax relief reduces the amount of tax you pay, helping you keep more of the money you earn. 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.

Working from home tax relief is specifically designed for remote workers. If you carry out your duties at home, you can claim expenses directly related to your work. Revenue accepts your home as a workplace if you log on to a work computer, send emails, or develop ideas remotely for substantial periods. Doing ad hoc work or bringing tasks home to finish in the evening does not qualify.

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.

The amount you get back depends on how you choose to cover your remote working expenses. There are two main options. Your employer can provide an allowance (which is free from tax, Pay Related Social Insurance (PRSI), and Universal Social Charge (USC), or you can claim tax relief directly from Revenue.

Note that if you share these expenses with someone else, the amount you receive in tax relief is calculated based on your share of the bill, not the whole amount. You can only claim for the days that you worked from your home during your normal working hours.

To be eligible for remote working 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 there,  related to your current work. For remote work in Ireland, 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 primarily work outside of your home, for example, if you visit clients and then complete some tasks at home.

These are the steps to calculate tax relief on 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 working from home 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 at a rate of 20% or 40% (whichever is the rate of income tax you pay).

If you split utility costs, remember that you can only claim tax back on the portion of the bill that you personally pay. 

Example: Let’s say you worked from home for 100 days last year. Your broadband bill is €40 per month, which equals €480 for the year. Your combined heating and electricity bills for the year total €1,500.

Calculation:

1. Add your total expenses for the year: €480 + €1,500 = €1,980

2. Multiply by the number of days worked from home: €1,980 x 100 = 198,000

3. Divide by the days in the year: 198,000/365 = €542.46

4. Apply the 30% relief rate: €542.46 x 0.3 = €162.74

In this scenario, your allowable expense for the year is €162.74. If you pay the standard tax rate of 20%, your actual tax refund is €32.55. If you pay the higher rate of 40%, you will receive €65.10 back.

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

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

The advantage of claiming tax credits 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

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

You can find more information on Revenue’s website, which covers how to claim remote working relief.

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