How does work-from-home tax relief work in Ireland — the €3.20 per day rule?

Ireland provides a work-from-home tax relief through two mechanisms. Employers can pay employees a tax-free e-worker allowance of €3.20 per day worked at home. This is paid directly by the employer without being subject to PAYE, PRSI, or USC. If your employer pays this allowance, no further claim is needed.

If your employer does not pay the allowance, you can claim a deduction yourself from Revenue for the actual vouched cost of working from home. The deductible amount is 30% of the cost of electricity and heat attributable to your work-from-home days, plus the cost of a broadband connection (pro-rated for business use). You must have receipts for utility bills and be able to show the number of days worked from home.

The claim is made through myAccount on revenue.ie using the Remote Working Relief section. You enter the number of days worked from home and the relevant utility costs. Revenue calculates the deduction and adjusts your tax credits accordingly.

This relief reduces your taxable income, not your tax bill directly. The saving is equal to the deduction multiplied by your marginal income tax rate. It does not reduce USC or PRSI.