Working from home and tax relief

Introduction

Working from home (also known as remote working or e-working) is where you work from home for substantial periods on a full-time or part-time basis.

You may be able to claim tax relief on the additional costs of working from home, including electricity, heating and broadband. The cost of items you buy, such as office equipment, is not eligible for Remote Working Relief.

You can apply for the tax relief after the end of the tax year or during the year. If you claim during the year, you can get real-time credits and have your tax reduced during the year.

If you use only part of your home for e-working, it does not affect exemption from Capital Gains Tax if you sell it as your principal private residence.

Can I get Remote Working Relief?

To qualify, you must:

  • Have an arrangement with your employer to work from home
  • Be required to perform substantive duties at home
  • Be required to work for substantial periods at home

Remote working involves:

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

You are not entitled to claim tax relief if you bring work home from the office outside of normal working hours, for example in the evenings or at weekends.

More information on the eligibility criteria is available in Revenue’s Tax and Duty Manual on e-Working and Tax (pdf).

What expenses can I claim?

Tax relief on e-working covers the additional costs of working from home. This includes:

  • Heating
  • Electricity
  • Broadband

Items you buy, such as laptops, computers, office equipment and office furniture, are not allowable costs for Remote Working Relief.

Should I pay tax on equipment from my employer?

If your employer gives you equipment that you need to do your work, like a computer or printer, and you mainly use it for work, it is not considered a benefit in kind. This means that you do not have to pay any tax for getting the equipment from your employer.

How much can I claim?

You may have extra costs when you are working from home including heating, electricity and broadband costs. Your employer can pay you a contribution towards these costs or you can make a claim for tax relief during the year or after the end of the year.

If your employer pays you a working from home allowance towards these expenses, you can get up to €3.20 per day without paying any tax, PRSI or USC on it. If your employer pays more than €3.20 per day to cover expenses, you pay tax, PRSI and USC as normal on the amount above €3.20. You should note that employers are not legally obliged to make this payment to their employees.

If your employer does not pay you a working from home allowance for your expenses, you can make a claim for tax relief during the year or after the end of the year. You will get money back from the taxes you paid. If you share your bills with someone else, the cost is divided between you, based on the amount paid by each person (see Example 2 below).

The amount of costs you can claim is based on:

  • How many days you worked from home
  • The cost of your expenses
  • The percentage of your costs that Revenue counts as working from home expenses

You can claim relief on costs at the following rates:

  • For 2022, 30% for electricity, heating and internet costs
  • For 2020 and 2021, 30% for internet costs and 10% for electricity and heating costs
  • For 2018 and 2019, 10% for electricity and heating costs only

You can only claim for the days that you work from home. This does not include times you may have brought work home to do outside your normal working hours.

Your annual costs are taken into account but you only get relief for the proportion of the days you spent working from home during the year. For example, in 2022 the proportion would be the number of days working from home divided by 365. For 2020, it was a leap year so you divide by 366.

How to calculate the amount you can get tax relief on

For 2022, to calculate the amount of costs you can get tax relief on:

  • Add your electricity, heating and internet costs and multiply the total costs by the number of days worked at home
  • Divide by 365
  • Multiply by 30% (0.3)

For the years 2020 and 2021, the relief for internet was 30%, as above. However, the relief for electricity and heating was 10%, so these costs would be calculated as follows:

  • Add the costs for electricity and heating and multiply the total costs by the number of days worked at home
  • Divide by 365 (or 366 in 2020)
  • Multiply by 10% (0.1)

For the years 2018 and 2019, the relief for electricity and heating was also 10%, and calculated in the same way, but there was no relief for internet costs.

Amount of tax relief

When you know the amount of costs that you can get tax relief on you can calculate your tax savings. You get tax relief on the amount of your costs at a rate of 20% or 40%, whichever is the highest rate of income tax you pay.

If your employer pays you an allowance towards your expenses, that amount paid is deducted from the amount you can claim back from Revenue.

Example 1

Mary worked from home for 9 months in 2021 while her office was closed due to COVID-19. To make a claim, Mary needs to work out how many working days she worked from home. She should exclude weekends, public holidays and any annual leave taken during the 9 months she worked from home. Her total working days are 168.

During 2021, her household bills for heating and electricity come to €1500 and her broadband comes to €450.

To find out how much tax she can claim back, she:

  • Multiplies the amount due on the electricity and heating bills by the number of days she worked at home (€1500 x 168 = 252,000)
  • Then, she divides her answer by 365 (252,000 / 365 = €690)
  • Lastly, she calculates 10% of this amount to find out what she can claim for heating and electricity (10% of €689 is €69)

Mary uses the same method to see how much tax she can claim back on broadband.

  • €450 (broadband bill) x 168 (days worked) = 75,600
  • 75,600 divided by 365 = €207
  • Revenue will let Mary claim 30% of the cost of broadband in 2021. 30% of €207 is €62.

This means, at the end of 2021, Mary can claim tax back on expenses of:

  • €69 for heating and electricity
  • €62 for broadband
  • €131 in total

The amount she gets back depends on her rate of tax. If she pays tax at the higher tax rate of 40% she will get €52.40 back from her taxes (40% of €131). If she pays tax at the lower rate of 20%, she will get €26.20 back (20% of €131).

Example 2

Sharon and Lar are married and both worked from home for 181 days in 2020 while their offices were closed due to COVID-19. Their household bills for heating and electricity come to €1,950 and their broadband comes to €600. They split the bills equally between them and each calculate the portion they can claim.

(Note: when calculating relief for 2020, divide by 366 days because it was a leap year. For 2021 and 2022, divide by 365 days.)

Cost of electricity and heat

Amount paid each €975 x 181 = 176,475

Divided by 366 = €482

10% allowable cost = €48

Cost of broadband

Amount paid each €300 x 181 = 54,300

Divided by 366 = €148

30% allowable cost = €45

At the end of the year, Sharon and Lar can each claim tax back on expenses of:

  • €48 for heating and electricity
  • €45 for broadband
  • €93 in total

The amount they gets back depends on their rate of tax. If they pay tax at the higher tax rate of 40% they will each get €37.20 back (40% of €93). If they pay tax at the lower rate of 20%, they will each get €18.60 back (20% of €93).

How to apply

You can claim tax relief online using Revenue’s myAccount service. For 2022, 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 expenses when you pay them and get increased tax credits in your subsequent payroll payments from your employer. You can make a real-time credit claim using myAccount.

To make a claim for a previous year, complete an income tax return online as follows:

  1. Sign into myAccount.
  2. Click on ‘Review your tax’ link in PAYE Services.
  3. Select the Income Tax return for the relevant tax year.
  4. In the ‘Tax Credits and Reliefs’ page (Page 4 of 5) select the ‘Your job’ tab. Select ‘Remote Working Relief' and insert the amount of expense at the ‘Amount Claimed’ section. (For 2018 and 2019, select ‘Other PAYE expenses’ under Tax Credits and Reliefs’).

You must be able to account for each expense you intend to claim. This means keeping a record of all receipts and bills. You can use the Receipts Tracker service to do this for 2020 and subsequent years. Otherwise, you should keep documents for 6 years from the end of the tax year that the claim is for.

Page edited: 20 July 2022