Revenue have updated their tax and duty manual on remote working relief to clarify conditions relating to the €3.20 per diem payment.

The guidance (reproduced below) now states that the Revenue practice for the relief may apply where:
a) there is an agreement in place between the employer and employee under which the employee works from home,
b) the employee performs substantive duties of his/her employment at home, and
c) performs his/her duties for substantial periods at home.

Treatment of Employer Reimbursed Remote Working Expenses
Revenue operates an administrative practice which allows an employer to make payments up to €3.20 per day to employees, subject to certain conditions, without deducting PAYE, PRSI or USC. There is no legal obligation on the employer to make such a payment and the payment is at the discretion of the employer.

This practice may apply where:
- there is an agreement in place between the employer and employee under which the employee works from home,
- the employee performs substantive duties of his/her employment at home, and
- performs his/her duties for substantial periods at home.

Amounts in excess of €3.20 per day paid by the employer should be subject to PAYE, PRSI and USC in the normal manner. Records of payments made must be retained by the employer for the purpose of any potential future Revenue compliance review.

In respect of a claim for RWR made by an individual, any payment made by an employer to reimburse an employee for expenses incurred while working from home, must be deducted from the RWR claim amount.

Where an employer does not pay €3.20 per day to the remote worker, the employee is not entitled to claim a tax free round sum of €3.20 per day. However, where additional expenses are incurred by a remote worker, the employee is entitled to claim RWR for a relevant portion of these expenses.