Rent, utilities, cleaning, coffee, printing, parking, stationery - employers have saved a packet with home working. Indeed, homeworking staff seem to have absorbed some of their bosses’ bills without a word. So why is nobody talking about getting paid back?
Yes, staff saved too — on transport, food and clothing. But does that mean they must stump up for the heat, light, broadband, furniture and food their employers once covered? I’m not sure workers knew they were agreeing to that.
Home working was coming anyway. A public health crisis just accelerated it. The crisis, however, has shaped the terms on which home working has landed. Employees wanting to hang on to the “privilege” of working from home post-pandemic weren’t going to quibble over bills. The result is a pandemic Trojan horse in which one-time employer costs have been smuggled into employees’ homes. The cost of heat, light and food is now eating into wages more than ever. Here are some ways you can claw back on the cost of working from home.
Does your employer contribute to your working-from-home expenses? Maybe it’s time you asked them. There is no question that working from home puts an additional burden on your household, especially in winter. The cost of electricity, heat and broadband required to complete your work should not fall to you. Good employers will acknowledge this and compensate you.
Employers can pay remote workers a working-from-home allowance of up to €3.20 a day without deducting income tax, PRSI or USC. They do the sums and it goes in your pay packet. Your costs might be higher than €3.20 a day, of course. Your employer may pay these higher costs, but any amount more than €3.20 per day paid by your employer will be taxed.
The trouble is that it is not mandatory for employers to pay this allowance. “Because it’s not mandatory, Revenue has no figures on whether employers are paying it,” says Laura Bambrick, head of social policy and employment affairs with the Irish Congress of Trade Unions (Ictu).
Some companies are trying to get it right. Liberty Insurance provides a €55-a-month working-from-home allowance to all employees. This is to “cover ancillary expenses they may incur”, and the company does its best to pay staff “in the most tax-efficient manner where possible”, the insurer says.
Last year, Liberty employees got a bursary of €460, too, to create a better workspace at home. “This was done in response to what employees said they needed. It also meets the expectations of flexibility required by the best talent in the market,” says branch manager for Ireland Stuart Trotter.
Where an employer provides a computer, printer, scanner and office furniture to enable you to work from home, there is no benefit-in-kind charge. It’s the same for a telephone line and broadband where the private use of the connection is incidental.
Just because you are saving on commuting costs, doesn’t mean your employer can use this as a bargaining chip, unions say. “Very few employers compensate their workers for the cost of getting to work. Our argument from the get-go has been they have no right then to claim that savings should be used towards business operational costs,” Bambrick says.
Employers who treat remote work as a benefit are still stuck in years-old thinking, says not-for-profit remote work group Grow Remote. It’s not a benefit, it’s a business model. Employers who don’t offer cost-effective remote working run the risk of losing talented employees to those who do.
Remote working relief
If your employer isn’t paying you the €3.20 a day working-from-home allowance, you can claim tax relief yourself. So how does it work? For 2022, you can claim 30 per cent for electricity, heating and internet costs. For 2020 and 2021, you can claim 30 per cent for internet costs and 10 per cent for electricity and heating. If you worked from home in 2018 and 2019, you can claim 10 per cent for electricity and heating costs only. You can only claim for the days that you work from home during each year. You get tax relief on your costs at a rate of 20 per cent or 40 per cent, whichever is the highest rate of tax you pay. Any payment by your employer for remote working expenses must be deducted from your claim.
Claiming this relief used to be a total pain, requiring the full arsenal of primary school mathematics. Indeed, so onerous was it, just 10 per cent of remote workers in Ireland have availed of this tax relief to date, according to tax-back company Irish Tax Rebates. Just 58,157 claims for working from home relief were received for 2021; that was down from 93,000 in 2020.
But things have been made a bit easier. You can claim the relief using Revenue’s MyAccount service, selecting Remote Working Relief on the tax, credits and reliefs page. The video How to Claim Remote Working Relief on Revenue’s website will help. (It would be easier again of course if your employer just paid the working-from-home allowance).
Some good news is you can now make a real-time claim on work-from-home bills. Electricity, heat and broadband receipts can be uploaded to the Receipts Tracker on MyAccount. “Just like medical expenses, if you are a PAYE worker, you can put in your costs and get tax relief in your next pay packet,” Bambrick says. You no longer have to wait the full year to get the tax relief back.
Don’t expect a windfall. Based on someone working 100 days a year at home, with estimated annual electricity costs of €1,500, heating €1,000 and broadband €576, a household could claim about €252 each year. Assuming you were paying the top rate of tax, the net benefit would be about €100. With a few years of home working under your belt, the combined amounts are worth claiming. Irish taxpayers have left over €171 million on the table in unclaimed remote working relief over the past two years, according to Irish Tax Rebates. Don’t let this entitlement go unclaimed.
Connected hub vouchers
Working from home costs money. Working from a remote hub can cost even more money, but a Government scheme provides some minor relief.
If you want to avail of free days at a Government-funded Connected Hub, then get cracking. Remote workers are entitled to three free days of hub use per person until the end of August.
To avail of the Connected Hubs Voucher Scheme, remote workers must register on the Connected Hubs website. The three vouchers are then credited to your account, with each one redeemable for a day’s hot-desk working in participating hubs. As of July 20th, some 1,602 voucher bookings were made at 169 hubs - so having a cost-free work space for a day is appealing to some.
From Ballinskelligs to Bundoran, Cootehill to Clonakilty, there are now 242 remote work hubs around the country. Some 400 hubs are pledged as part of the Government’s rural development policy. A second phase of the free voucher scheme will start in September and will run for longer.
Without the vouchers, workers pay a daily rate for a desk. Rates will depend on the hub. A hotdesk in Kilkee, Co Clare will set you back €10 a day or €40 for the week. Elsewhere it can cost up to €25 a day. Remote Working Relief does not cover expenses incurred by an employee for renting desks in hubs. If your employer pays for the hub, however, the cost is deductible when computing their taxable profits.
And in case you were wondering, if you use only part of your home for remote working, your home remains your principal private residence and you are not liable for capital gains tax when you sell it.
Go back to the office
Depending on your commute, it might be cheaper to hightail it back to the office this winter. With energy prices set to soar, returning may be more cost effective than heating and lighting your house for eight hours. It will certainly spare you the very specific bill anxiety of switching on your heating during the day.
If commuting costs mean you won’t save, then treat your house like a business premises and cut your overheads. One quick fix is to replace all your bulbs with LEDs. “Replacing just one bulb will save you around €6 a year in electricity,” says Darragh Cassidy, head of communications at Bonkers.ie. Start with the bulbs in your home office. If your immersion is still set to your pre-pandemic routine, make some changes, advises Cassidy. There is no point heating water between 5am and 7am if you are now sleeping in until 8am.
Next, switch energy providers to avail of a new customer discount. “Discounts of up to 40 per cent or more are available for a year with some suppliers, which can help take the edge off record energy prices,” says Cassidy. Find out the name of your supplier, when your contract is up, the name of the plan or the unit rate you are paying and the cost of some of your winter bills last year. Then use a price comparison website approved by the Commission for Regulation of Utilities (CRU) to find the best deal for you. Put a reminder in your phone to switch again when your contract expires.
Watch this space
The draft Right to Request Remote Work Bill, published earlier this year, says little about expenses, except that, when a homeworking request is granted, the employer must put in writing “details of any allowances payable to the employee to cover the costs associated with remote working”.
There are a myriad of legal and financial issues that the Bill ignores, says solicitor Richard Grogan, principal at Richard Grogan & Associates. “There is nothing in the new Bill about employers being able to reimburse the cost of light and heat,” says Grogan. “Everyone is sticking their heads in the sand. Employers can only reimburse employees for actual expenses incurred. To do this would mean them asking everyone for their electricity and broadband bills. That’s not going to happen.
“All of the solicitors dealing with this area are going to end up bald. We are pulling our hair out with frustration because how is all of this going to work in practice?
“Expenses have to be addressed in a way that is fair to employers and employees, but it has to be addressed. Otherwise, we are going to have tax nightmares coming down the road and unnecessary disputes down the WRC, with people saying they should be reimbursed.”