Understanding the Remote Working Daily Allowance

Remote working has transformed the Irish workplace, and with it comes important tax considerations. Two distinct mechanisms help remote workers manage their additional costs: the employer's working from home allowance and Revenue's Remote Working Relief.

The €3.20 Tax Free allowance

The working from home allowance is a payment your employer can make to you for days you work remotely. Up to €3.20 per day can be paid completely tax-free—meaning no income tax, PRSI, or USC is deducted from this amount.

This tax-free treatment applies when you have a formal remote working arrangement with your employer and you work from home for substantial periods performing substantive duties. The allowance is managed entirely through your employer's payroll system, so you do not need to make any claim to Revenue for this benefit. Importantly, employers are not obliged to pay this allowance.

Remote Working Relief from Revenue

Remote Working Relief is a separate tax relief that you claim directly from Revenue. This relief allows you to claim back tax on 30% of the work-related part of your actual household expenses.

Eligible expenses include:
• Electricity
• Heating
• Broadband

The calculation is based on the number of days you worked from home during the year. Crucially, any allowance or reimbursement your employer pays you towards these costs must be deducted from your Remote Working Relief claim – you cannot receive tax relief twice on the same expense.

Who Can Claim the Relief

You can claim Remote Working Relief if you are an employee who works from home on a regular basis. The key requirements are that you must have a genuine work-from-home arrangement and incur additional household costs as a result.

This applies to both full-time remote workers and those in hybrid arrangements who split their time between home and office. You can only claim for days when you genuinely worked from home—not for office days, annual leave, or sick leave.

How to Claim Remote Working Relief

Claims are made through Revenue's myAccount system. You have two options for timing your claim:
• Real-time during the year: Update your tax credits in myAccount, and the relief applies to your pay as you go.
• After year-end: Complete your tax return and claim a refund for the full year.

To make your claim, log into myAccount and navigate to 'PAYE Services', then 'Review Your Tax'. You will need to provide details of your actual expenses and the number of days worked from home. Keep records of your utility bills and remote working days, as Revenue may request evidence to support your claim.

Financial Planning for Remote Workers

Smart financial planning means understanding both mechanisms and using them effectively. First, check whether your employer offers the working from home allowance. If they do, ensure it is being processed through payroll correctly.

Next, track your actual remote working expenses throughout the year. Monitor your electricity, heating, and broadband bills, and keep a record of days worked from home. Compare your actual costs against any employer allowance received to determine if you have a valid Revenue claim.

Many remote workers find their genuine costs exceed what the employer allowance covers. Heating a home during working hours in Ireland's climate, running computers and equipment, and increased broadband usage all add up. The relief on these actual expenses can provide meaningful tax savings beyond the employer allowance.

Key Points to Remember

• Employer allowance: Up to €3.20 per day, paid tax-free by your employer through payroll.
• Revenue relief: Tax relief on 30% of electricity, heating, and broadband costs apportioned by days worked from home.
• You claim Revenue relief yourself through myAccount.
• Employer allowance must be deducted from Revenue claims—no double-claiming.
• Keep records of expenses and remote working days.
• Relief reduces taxable income, so savings depend on your tax rate.