With more people working from home, it is important that employers understand the tax implications of providing office and computer equipment for their employees, says Nikki Johns.
Even before the Covid-19 pandemic struck, a shift towards remote working has been underway in recent years. Many employees now work from home on a part- or full-time basis, and employers often provide equipment to facilitate this work.
Usually, Revenue considers the provision of any non-cash benefit to be a Benefit-in-Kind (BIK) and subject to tax through the payroll system. However, the provision of certain necessary equipment for an employee working from home (such as computers, printers, scanners, telephones and office furniture) is exempt from BIK provided that any private use of this equipment by the employee is minimal.
If an employer pays an employee’s private home or mobile phone bill, usually 50% of the bill value will be liable for BIK tax unless the employee can prove that less than 50% of their phone use was private.
Heating and electricity
An employer can pay an employee a tax-free allowance of €3.20 per working day to cover expenses such as heating and electricity.
At the time of writing, Revenue have introduced several alterations to the application of BIK in response to the Covid-19 pandemic. You can read more about this in our blog on Benefits-in-Kind and Covid-19: What You Need to Know .
Our payroll team can calculate Benefit-in-Kind and/or operate your payroll on your behalf so if you need assistance with these time-consuming tasks why not check out our payroll services page or contact our CEO Sarah Daly to find out more about our services and how we can help you.