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Revenue Updated Guidance on eWorking and Tax

20 March 2020

Revenue today (20 March 2020) updated their guidance on the tax treatment of e-workers and
remote workers (link to the full Revenue guidance here).

In their updated guidance, Revenue clarify that the circumstances in which an employer may pay
an employee up to €3.20 per day to cover the additional costs of working from home extends to
cases where the Government recommends that employers allow employees to work from home
to support national public health objectives, as in the case of Covid-19.

If the employer does not make this payment, the employee is not entitled to claim a round sum of
€3.20 per day. However, the employee may be entitled to make a claim (see below) in respect of
actual vouched expenses incurred wholly, exclusively and necessarily in the performance of the
duties of the employment. If the employee makes such claim, any reimbursement of expenses by
the employer, such as the daily allowance of €3.20 referred to above, must be deducted from such
a claim by the employee.


Method of claiming e-working expenses by employees

E-working expenses can be claimed by completing an Income Tax return, which an employee can
complete from the Revenue website by taking the following steps:
  • Sign into myAccount (link)
  • Click on ‘Review your tax’ link in PAYE Services;
  • Select the Income Tax return for the relevant tax year;
  • In the ‘Claim for Tax Credits, allowances and Reliefs’ page select ‘Allowable Deductions incurred in Employment’ and insert the amount of expense at the “Amount” section.
As a claim may be selected for future examination, all documentation relating to a claim should
be retained by the employee for a period of six years from the end of the tax year to which the
claim relates.


E-working calculation for claim by employee

Revenue provide the example on the next page to demonstrate the approach to be followed by
employees in claiming relief for allowable(1) e-working expenses.

(1): “Allowable” refers to expenses that are incurred wholly, exclusively and necessarily in the performance of the duties of their employment”.


Example:

Eve works 180 days in total during the year, and 90 of these days are from home. The annual amount paid on allowable utility bills (heating and electricity) is €1,750:

The portion of utility bills that applies to e-working days is:

Allowable utility bills x No. of e-working days
365 days

€1,750 X 90/365 = €432

This amount (€432) should then be apportioned between use for employment purposes and private use. Revenue are willing to accept that the average proportion of the house attributable to a home office is 10%. Therefore, in this example, the amount of e-working expenses that would be “allowable deductions incurred in employment” is €432 X 10% = €43.00 (this is the e-working expense amount due).

If you have any queries related to the above, please contact Mark Hynes ([email protected]) or Laura Murray ([email protected]) of our Employment Tax Team.


Link to previous article