Coronavirus: IR makes it easier to reimburse work-from-home expenses

PHOTO: NOT-FOR-SYNDICATION Employers that have the means can now pay staff $20 a week tax-free to help meet the extra costs they may be incurring working from home, with the minimum of hassle.

Inland Revenue is making it easier for employers to reimburse the expenses of employees who are working from home because of the coronavirus pandemic.

A new determination from the tax department means employers can pay employees up to $20 a week tax-free for expenses such as additional heating costs, without having to estimate or show what the employee’s actual expenses were.

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Employers can also now make a tax-free payment of up to $400 per employee for furniture costs, also without having to gather evidence on how the money is spent.

The rules are a “temporary response” to the Covid-19 pandemic and would only apply to payments for expenses incurred between March 17 and September 17, it said.

Employers have previously only been allowed to make a $5-a-week tax-free payment to employees for phone expenses before needing evidence that expenses had been incurred as a result of working from home.