Home office and its tax implications
08 April 2020
Nowadays, many employers see home office as a way of maintaining the smooth running of a company and work. By minimising the risk of contracting and spreading the coronavirus, work at home is no longer perceived simply as a benefit, but as a necessity when the nature of the work permits.
The tax aspects of working from home are dealt with by the Coordination Committee of the Chamber of Tax Advisors (KOOV number 546 / 26.06.19). According to the Labour Code, dependent work can be performed not only at the employer's workplace, but also at another agreed place, including the employee's place of residence. This change of place of work requires the agreement of both parties, i.e. the employer cannot order the employee to work from home. Under the current legislation and when all legal conditions set by the Labour Code are met, the employer is obliged to reimburse the employee for the costs demonstrably incurred during the work. These costs are tax deductible for employers. The employee does not incur taxable income from employment and the compensation is not subject to social and health insurance.
- Costs of wear and tear to property - The employee is obliged to prove these costs. Compensation for wear and tear of own tools, equipment and items required for the performance of work may be determined by a lump sum. This expenditure will be considered proven up to the flat-rate amount specified in the collective agreement or in the employer's internal regulations, provided that the flat-rate amount has been demonstrably determined by the employer based on the calculation of actual expenditures.
- Expenditures for electricity, water, gas and heating - Unlike the compensation for wear and tear to property, these costs cannot be compensated according to a flat rate or quantified by an expert opinion. The employee may require the employer to reimburse a proportion of these expenses. The proportion is determined based on the chosen criterion, e.g. the ratio of the floor area in the room in which the employee performs work to the total floor area of the house or apartment.
- Telephone expenses – If the employee does not have a company phone, a detailed record of all calls made within the scope of work must be kept. Or by comparing the reimbursement of telephone costs for another comparable period before starting work from home, while considering any adjustments to the price and fees of the service provider.
- Compensation for internet connection costs – The calculation of cost compensation should be based on the actual use of the internet for dependent work from home and any private use by the employee.
- Catering allowance – We recommend setting up a work shift within the home office, e.g. each employee must work at least five hours a day or fixed working hours from 9 a.m. to 2 p.m. The employee must keep track of all hours worked. If an employee has worked for at least three hours per day, he/she is entitled to a subsistence allowance.
We recommend that you set out the conditions for home office in an internal directive, specifying the working hours and how they are recorded, how employees are reached, how home office is monitored, occupational health and safety rules, reimbursement of costs incurred by employees when working from home and the method of communication between the employer and the employee.