Irish Revenue has published an updated Tax and Duty Manual 05-02-13 which covers the tax treatment of expenses and benefits for certain e-workers, writes Thalia O'Toole, Head of Global Mobility at KPMG in Ireland.

The updates include the following:

  • Guidance on the treatment of expenses incurred by an e-worker relating to light, heat and broadband including where those costs are incurred solely as a result of the COVID-19 pandemic or shared by another e-worker
  • Confirmation that no tax relief will be available for expenses incurred personally by an e-worker which relate to capital items such as office equipment
  • Clarification that the normal place of work for an e-worker, including during the period of COVID-19, remains the office
  • Examples of eligible and non-eligible expenses and benefits 

Employee Eligibility Conditions as an e-Worker

There is no change to the general definition of an e-worker for the purposes of income tax relief. It remains an individual who works partially or fully from home and who uses technology daily to log-in to an employer’s computer system and remotely exchange data and ideas, develop or deliver products and services. 

For income tax relief to apply the following conditions must normally be met;

  • There must be a formal agreement in place between the employer and the employee under which the employee is required to work from home;
  • An employee must be required to perform substantive duties of the employment at home; and
  • An employee must be required to work for substantial periods at home.

Substantive duties or periods does not include where an employee has chosen to work at home or that the activities performed are of an administrative or ancillary nature.

During COVID-19, where working from home has occurred solely because employers and employees are following Irish Government guidelines, those employees will also be considered eligible employees for the purposes of tax relief during this period. 

Normal Place of Work for an e-Worker

The guidance confirms Revenue’s view that irrespective of how many or how few days are spent by an e-worker in the office, the normal place of work for income tax purposes remains the employer’s place of business.

This means that travel from home to the office is never business travel and employers should not include this mileage when calculating any reduction in company car benefit in kind for payroll purposes. Further, where the employer reimburses mileage claims for private car usage or other travel costs in travelling from home to the office or covers the costs of accommodation or subsistence while attending the place of business, these costs are considered personal and fully taxable as earnings through the PAYE system.

Where business travel starts or ends at home, the distance which constitutes business travel must be calculated based upon the “lesser of” rule. This is the lesser of:

  • The distance travelled from home to the temporary work location, or
  • The distance travelled from the office to the temporary work location

For example, the employers place of business is in Naas, Co. Kildare while an e-worker lives in Cork. A key client of the employee is based in Citywest, Dublin. Business travel for the purposes of tax relief will be limited to the distance from the office in Naas to the client’s premises in Citywest. A record of the distance should be obtained from Google maps to support the expense claim or benefit in kind reduction. 

Available Tax Relief

A distinction is made between employer provided benefits and those that an employee incurs personally.

Office Equipment & Furniture

The table below sets out the differences in tax treatment on costs incurred on equipment and furniture to enable an employee to work from home safely:

Examples of Office Equipment/Furniture

Purchased and Owned by Employer

Purchased and Owned by Employee

  • Computers
  • Laptops
  • Hand-held devices
  • Printers
  • Scanners
  • Software
  • Desk
  • Chair
  • Materials connected to the above e.g. screens, keyboards

Not taxed as a benefit in kind once private use is incidental to business use. 


On leaving employment, employee should return the equipment to the employer or pay market value at that time to avoid a benefit in kind arising on exit.

Costs incurred from net pay with no tax relief available from Irish Revenue for the employee.


Where the employer reimburses employee costs, these are treated as earnings for PAYE/PRSI purposes at time of payment.

Light, Heat and Broadband Costs

Employer Paid Per Diem

There is no change to the previous guidance which allows an employer to pay a tax-free per diem of up to €3.20 for each remote working day. This per diem is designed to cover all incremental utility costs incurred during the homeworking period including light, heat and broadband.  

The per diem can only be paid tax free provided no travel and subsistence costs are reimbursed for the same day. This means that an employee working from home but who incurs qualifying travel or subsistence expenses while travelling to a client’s premises on a given day which are then reimbursed should either not receive the per diem for that day or the employer should treat the per diem paid for that day as taxable earnings for payroll purposes.

Employee Incurred Expenses

Where the employer does not pay a per diem, the employee may make a claim to Irish Revenue for a percentage of the actual daily costs incurred on foot of supporting evidence.  Only amounts incurred personally can be claimed. Therefore, where costs are shared only that portion of the expense incurred by the individual may be claimed, a claim may be made by the individual who incurred the remaining portion  where they are also considered an e-worker.  

% of Light & Heat Costs claimable by an e-Worker from Irish Revenue from 2020

% of Broadband Costs claimable by an e-Worker from Irish Revenue from 2020

10% of cost of electricity and heat apportioned based on the number of days worked from home over the year.


30%* of the cost of broadband apportioned  based on the number of days worked from home over the year.

 *The tax relief available for broadband will apply for the duration of the pandemic.

To calculate the available light, heat and broadband costs, before applying the relevant percentage, the following formula should be used:

Relevant costs of the e-worker x Home Working Days / 365

An example of how to calculate the value of the pre-tax deduction is set out below:



      Light & Heat Claim

    Broadband Claim

Home Working Days




Total Household Costs in 2020 




Total Costs borne by e-Worker 




Total Days in Year




Available for relief [C*A/D]




Relevant %




Pre-Tax Deduction Claim [E*F]




In order to claim tax relief, the employee should file an income tax return using the MyAccount facility on the Revenue website and make a claim under ‘Tax Credits and Reliefs’ section of the tax return. The value of the pre-tax deduction calculated should be inputted into the “Amount Claimed’ section of ‘Remote Working (e-Working) Expenses’ on that page. Evidence of the value of costs and the number of home working days will need to be kept by the employee for six years from the end of the tax year to which the claim relates.

Get in touch

For more on how the tax implications of remote working could affect you or your employees, get in touch with Thalia O'Toole, Head of Global Mobility Services, or one of the People Services team.

Further reading