The e-worker tax relief can be beneficial for remote employees who are looking for ways to cut down on the increasing costs of working from home. Employers can pay employees a tax-free sum of €3.20 per day.
It’s been over three months since a large percentage of the Irish workforce began to work from home due to Covid-19.
It didn't take Irish workers long to adapt to the new normal, but many are continuing to experience increased costs such as higher energy bills as a result.
As the new practice of remote working is likely to become a mainstay for more people as the economy re-opens, it’s more important than ever to keep a watchful eye on your finances.
That being said, a recent survey conducted by Taxback.com has shown that 63% of people working from home in Ireland are still unaware of the various tax reliefs available to them.
Here's what the survey highlighted.
Who is Taxback.com?
Taxback.com is a multi-national corporation providing specialist tax return services to private and corporate clients across 100 countries.
Established in Dublin in 1996 and led by a team of entrepreneurial business executives Taxback.com has 27 offices worldwide, in Europe, Australasia, the United States and South America, and a staff of over 940.
The Taxpayer Sentiment Survey, conducted by Taxback.com, asked 2,500 people in Ireland their views around the existing e-worker tax reliefs to gain an insight into the awareness of the incentive from the workforce.
The survey revealed that a staggering 70% of respondents were not aware of the tax relief available to those who worked from home, and of those who are currently working remotely, 63% were also unaware.
The survey results are surprising considering recent data released from the Central Statistics Office (CSO) showed that, of the 47% of people who have experienced an impact to their employment as a result of the coronavirus, 34% started working from home.
The tax relief is but one useful way remote workers can help to offset the increase in costs they are experiencing due to the sudden need to work outside the office, such as increased energy and broadband expenses.
Joanna Murphy, CEO of Taxback.com said:
“At a time when every penny counts for households, it’s important that people know what they are due and claim accordingly.
We are trying to get the message out to that large cohort of people that are working from home that there are ways to help offset the extra financial burden incurred such as extra ESB, broadband or heating costs.”
Tax incentives vs Childcare funding
The survey from Taxback.com also explored the attitudes of respondents when it came to either incentivising tax measures to work from home or towards helping to provide greater funding for childcare for families.
Slightly more people at 55% would prefer to see an increase in tax incentives for remote workers, while 45% preferred increased funding for childcare in the State.
Interestingly, of those who would prefer a working from home tax incentive introduced, 24%, or almost half, have children.
At the same time, of the 45% who would prefer to see the money used to fund childcare, 22% of these people don’t have children.
How to get tax relief
If you’re considering making use of the e-worker tax relief you’ll be glad to know it’s very easy to do and is a great way of helping to offset any extra costs you might have incurred since beginning to work from home.
It’s possible for employers to pay remote staff up to €3.20 per day, or €768 per annum, and the payment is tax free. In other words you won’t pay PRSI, PAYE, or USC on the payment received from your employer.
However, employers are under no legal obligation to pay it.
If you can’t avail of the scheme from your employer, fear not, as you can still claim money back on things like your heating and broadband against your tax bill at the end of the year. If you’re going to do this, however, you’ll need to have copies of all your bills and expenses, as well written correspondence from your employer to state that you are eligible.
To find out more about the tax relief you can read our guide on e-worker tax relief and our article on 12 ways to save money while working from home.
Are you looking to save money? Another simple way to save money on your household bills is by switching the provider of your utilities and this can be particularly effective if you haven’t done so in more than a year.
Switching your energy supplier is easy with bonkers.ie! Why not use our energy comparison tool right here and see how much you could save in just seconds.
Before switching, make sure you check out our guide on these 7 things to consider before switching supplier.
With inflation on the rise, you may also be interested in taking a look at the following articles to cut down on your monthly expenses:
- If you’re looking to heat your home for less in the long term, consider retrofitting. There are several finance options available for you to review.
- Adjust your everyday habits to become more energy-efficient and save yourself some money on your electricity bills with these 15 ways to use less electricity.
- See how you can easily save money by reducing your home insurance costs with these 10 easy tips.
You’d be pleasantly surprised at how much you can save by switching your mortgage. Check out which banks offer the best rates and learn more about switching costs here.
Keep in touch
Are you working from home and availing of the e-worker tax relief? What do you think? Is it enough? Let us know in the comments below.