A year and a half after the start of the pandemic, many employers have created their home office refund policy and extended it until the end of 2021. And even more likely, they will allow their employees to work from home on a full-time basis. In addition, people are accustomed to the convenience of working from home, and more and more employees and employers are choosing remote jobs rather than working from an office.
The trend towards allowing employees to work remotely looks set to continue, but the particular way most companies handle the large-scale shift to work outside the office isn’t always sustainable in the long run. For a home office to be productive, efficient, and comfortable, employers need to implement or rethink home office expense reimbursement policies, procedures, and benefits. Understanding the challenges your employees face and offering them the solutions they need can help ensure your success. Ignoring these needs can lead to dysfunction, resentment, and even legal action.
In this article, we will cover such topics as home office expense tracking and reimbursements.
- How to Help Employees to Create Home Office?
- What Expenses Can You Claim for Home Office?
- How to Get Home Office Tax Refund?
- How to Set Up a Reimbursement Account for Remote Workers?
How to Help Employees to Create Home Office?
Some companies provide employee bonuses to help ease the financial burden of creating a comfortable and productive home office. It all started with Shopify, Google, Facebook, and Twitter, who began giving remote workers $1,000 to prepare home offices. Another approach combines a one-time start-up benefit with full or partial ongoing reimbursement for home Internet and mobile services.
There are companies, who have strict restrictions on the use of business funds. Some reimburse only office supplies, while others expand coverage to include furniture such as tables and chairs. As noted above, some of these also include periodic bonuses for business use of an employee’s phone and home Internet access. Benefits can be configured to include money to cover other home office expenses, such as higher utility bills.
What Expenses Can You Claim for Home Office?
Your company’s refund policy should necessarily include such sections as deductible and nondeductible expenses. This allows your employees to feel more confident with the information they need and also helps to avoid any incidents and misunderstandings. Make sure you include the following detailed information about the rules and restrictions of the employee reimbursements.
So what expenses can you claim for home office? To start with, all the equipment needed for you or your employee to work comfortably: table, chair, computer or another electronic device. If your business is, for example, in the field of design and requires employees to acquire and use physical media of works of art, as an employer you must reimburse the costs. Reimbursement also applies to programs and software, which your employees subscribe to with their own money, or use while performing tasks.
If your employees work from home, they can’t claim deductions for the following expenses:
- coffee, tea, milk and other home items that you as an employer may provide at work;
- equipment that a worker buy as a personal thing, for example, iPad;
- any items for which your employer pays or reimburses you for expenses.
How to Get Home Office Tax Refund?
As an employer, you also need to claim deductible and nondeductible expenses. Your employees are able to list any work-related expenses on their tax returns if you have not reimbursed them. These include work equipment such as office supplies and workbooks or literature, costs associated with a job application such as postage and photocopies, as well as training courses, language courses, travel or relocation costs. Job-related expenses also include home office expenses. For example, sometimes remote workers are allowed to deduct a portion of their rent, telephone, and Internet expenses.
When filing the tax return, you can indicate both your share and your employee’s share of all contingency expenses. Any service or utility used solely for business purposes may be deducted in full. This includes office supplies, telephone lines, and computer equipment. The number of deductions allowed will depend on several factors, including how the homeowner reports his income and his income, but most will be able to claim multiple items as expenses if incurred in the normal course of business.
How to Set Up a Reimbursement Account for Remote Workers?
One of the most popular trends in small and large companies now is full digitalization. The rejection of a paper office in favor of special applications and software is beneficial not only for business but also for every employee in the company. Especially in such a difficult time, when most of your employees work from home and paperwork does not save you either time or money.
The fastest way to make life easier for both an accountant and an employee is to create a reimbursement account. Expense Sensei application is one of today’s market leaders in the area of expense tracking and reimbursement software. The app allows you to make reimbursements in advance when sending employees to work from home. This is useful if you are providing money for remote employees to set up a home office.
Expense Sensei also allows employees to choose one of the many categories and submit an expense in a couple of minutes. All the workers need to do is upload the receipt, fill in and submit an expense and create a report. Once a report is showcased for an accountant, the reimbursement can be immediately made.
As you can see, the move to remote work creates unique challenges and costs for employees. Failure to address them can negatively impact your organization’s ability to attract and retain high-quality candidates for the position, as well as harm the health and productivity of your workforce. To ensure that your employees will successfully organize their home offices and work remotely with no fuss, you should consider creating a reimbursement account for them.