Fiscal regulations working from home
Although working from home is currently not always a choice but a necessity, there are considerable benefits. More flexibility, less commuting and a better balance between work and family are reasons for employees to adopt a new work-from-home-culture. For employers higher productivity and lower expenses are benefits when employees are working from home. Additionally, there are fiscal benefits. However, you will need to know what those are to make use of them. In this article you can read about compensations and deductibles when you (have employees that) are working from home.
What can employers compensate tax-free?
To make working from home more appealing, it is important that employees can arrange a suitable working place. The assets that are required for that can be compensated by employers tax-free. So when you need a printer or laptop, the employer can offer those. Instead of supplying these assets, employers can also choose to have a budget per employee that they can use to arrange their working place at home. For the arrangement of a workplace at home the employer can compensate the employee for €1815 per five years, tax-free.
Criterion of necessity
To determine whether something can be compensated tax-free, and should not be included into the taxable income of the employees, the so-called criterion of necessity applies. When assets are necessary to work from home, these do not fall under the exemptions.
When is an asset necessary?
The criterion of necessity applies when things are used for company purposes for at least 90%. So, for example, a phone-, or internet subscription that is used for both business and private use, does not (usually) fall under the criterion of necessity. It is up to the employer to estimate whether it is a reasonable assumption that the employee needs the asset to work from home.
Residual value assets
Have assets been purchased according to the criterion of necessity to work from home and does the working from home stop? Then, the asset will no longer be for company use, but will still have a residual value. This amount will need to be paid back by the employee or added to his taxable income.
For example: An employee has purchased a computer monitor to work from home that was deemed necessary. After the period that the employee worked from home, the monitor has a residual value of €250,-. The employee keeps the monitor. He does not pay for it and no longer uses the monitor for work. The €250 is added to his taxable income.
Health & Safety requirements
Are there assets that do not meet the criterion of necessity requirements, but are necessary to meet the requirements of the Health & Safety legislation? Then, these can be compensated by the employer tax-free. For example, an office chair can be necessary to ensure the workspace meets the demands of the Health & Safety legislation. In this case the so-called “Arbovrijstelling” (Health & Safety exemption) applies.
Many employees with a fixed travel expense compensation, travel less to and from the office because they are working from home. Therefore, the travel expenses will also decrease. Nevertheless, the compensation -when this has been granted before March 13th, 2020 - can be continued. The travel pattern from before the Corona measures that asked people to work from home as much as possible can be assumed. When these measures, and therefore the necessity to work from home ends, the travel expenses can be compensated according to the actual commute.
It will not be big amounts, but employees working from home will make additional expenses, that they wouldn't make when going to the workplace. Coffee and lunch, utilities, office supplies, toilet supplies; they are all used more often at home. However, who is responsible for these expenses?
Although no separate fiscal regulation has been created for this, the labour expense scheme can be used to compensate the employee. Employers were allowed to use up to 1.7% of the total salary amount for these kinds of expenses. Because of the Corona crisis, this has been extended to 3%. With this extension the government wants to support employees with tax-free provisions. Energy use, food, toilet paper or some flowers to gift to an employee can therefore be paid out of the labour expenses scheme.
As of 2023, employers are allowed to compensate their employers tax free, for working from their home with up to €2,15 a day. This sum is based on calculation from Nibud, that frames the estimated costs of heathing, coffee, toilet paper et cetera.
Please note the regulations mentioned below when you are working from home or have employees working from home:
- The things that are used by the employee that is working from home remain the property of the company. These are, similar to the assets at the office, not personal property of the employee.
- Are you an employee and want to know what you are entitled to in regard to your home office space? Check your Collective Labour Agreement. In some cases supplemental arrangements have been made in regard to working from home.
- Does the employee feel he or she needs a more expensive version of a necessary asset for the home office space? Then the employer can let the employee pay the additional value from the individual choice budget (IKB) of the employee.
Want to learn more about working from home?
If you would like to know more about the fiscal consequences of working from home, you can read more about that on this page (in Dutch only) of the Tax Authorities. The FNV website has more information about the compensations and conditions for working from home. Lexlupa provides with information in English on the consequences and regulations for entrepreneurs due to corona in this article.
If you are an entrepreneur and want to learn more about fiscal regulations concerning your home office, you can find more information here.
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