Remote and Hybrid Working: The Tax Rules Irish Employers Should Understand

At Arkins Kenny & Co we believe that remote and hybrid working is now a permanent part of how Irish businesses operate. What began as an emergency measure has become an expected benefit for many employees, and a valuable tool for employers competing for talent. Yet working from home brings its own set of tax rules, and many employers are still unsure how allowances, equipment, travel and overseas working should be treated. Getting these details right protects your business from unexpected liabilities and helps your team make the most of the reliefs available.

The Remote Working Daily Allowance

Employers can currently pay employees a remote working allowance of up to €3.20 per day without deducting income tax, USC or PRSI. To qualify, the employee must be working from home under a genuine remote working arrangement agreed with the employer. Occasionally taking work home in the evening or working from home now and then on an informal basis does not count.

The allowance is intended to contribute towards the extra costs an employee faces, such as heating, electricity and broadband. Employers can choose to pay more, but any amount above the tax-free limit must be processed through payroll as normal pay. Paying the allowance is optional, so it is worth considering whether it fits your wider approach to rewarding staff.

What Happens If No Allowance Is Paid?

Where an employer does not pay the daily allowance, or pays less than the tax-free amount, employees may be able to claim tax relief themselves. Relief is generally available on a portion of their vouched electricity, heating and broadband costs, apportioned according to the number of days they worked from home during the year. Employees can claim this through their annual tax return.

Employers are not responsible for making these claims, but explaining the position to staff is a simple way to add value to your remote working arrangements, particularly where you have decided not to pay an allowance.

Equipment and Home Office Costs

Many employers provide equipment to help staff work effectively from home. Items such as laptops, monitors, printers, office chairs, desks and mobile phones can generally be provided without creating a taxable benefit, provided they are supplied mainly for business use. Some incidental personal use is usually acceptable.

The position is different where an employer pays for something that is primarily for the employee’s personal benefit, or gives cash in lieu of equipment. Cash payments are generally treated as taxable pay. Keeping a clear record of equipment provided, and having a written policy on its use and return, helps demonstrate that items are genuinely provided for work.

Travel Expenses and the Hybrid Commute

Travel is one of the most misunderstood areas of hybrid working. Many employees assume that because they work from home on some days, travelling to the office on other days counts as business travel that can be reimbursed tax free. In most cases, this is not the position. Journeys between home and an employee’s normal place of work are generally treated as ordinary commuting, regardless of how many days they spend at home.

There are exceptions, for example where an employee travels from home directly to a client site or temporary workplace, or where the nature of the role genuinely requires home to be a place of work. Employers who reimburse travel costs should make sure their expenses policy reflects these rules, as incorrect tax-free payments can lead to liabilities for the business.

Employees Working From Abroad

Remote working has made it easier for employees to work from other countries, whether for a few weeks or on a longer-term basis. This can create significant tax complications. Depending on the circumstances, an employee working abroad may become liable to tax in another country, and the employer may have payroll, social insurance and reporting obligations there.

In some cases, an employee working overseas could even create a taxable presence for the business in that country. Before agreeing to any request to work from abroad, employers should check the tax and social insurance position carefully. A clear policy setting out when overseas working is permitted, and for how long, can prevent costly problems.

Reporting and Record Keeping

Since 2024, employers have been required to report tax-free remote working allowances to Revenue as part of the Enhanced Reporting Requirements. Details of payments must be reported on or before the date they are made, alongside other reportable expenses such as travel and subsistence.

Good records are essential. Employers should keep copies of remote working agreements, records of the days employees work from home and details of any allowances or equipment provided. These records support the tax treatment of payments and make it easier to respond if Revenue raises questions.

Have a Clear Remote Working Policy

Employees also have the legal right to request remote working, and employers must consider such requests properly and respond within set timeframes. A written policy that covers eligibility, allowances, equipment, travel, overseas working and reporting helps ensure requests are handled consistently and that the tax treatment is correct from the outset.

Getting the Details Right

Remote and hybrid working can benefit both employers and employees, but only when the tax rules are applied correctly. Reviewing your allowances, equipment, travel policies and reporting processes now can prevent errors and give your team confidence that their arrangements are properly managed.

At Arkins Kenny & Co, we help employers set up compliant remote working arrangements, manage payroll and reporting obligations and make the most of the reliefs available.

If you would like to discuss your business, contact us on or email joea@arkinskenny.com or visit arkinsaccountants.com.

Disclaimer: This article is based on publicly available information and is intended for general guidance only. While every effort has been made to ensure accuracy at the time of publication, details may change and errors may occur. This content does not constitute financial, legal or professional advice. Readers should seek appropriate professional guidance before making decisions. Neither the publisher nor the authors accept liability for any loss arising from reliance on this material.