Office@home allowance now regulated by Circular letter dd July 14, 2020.
Telework already exists for many years and can be described as “any form of organization and/or execution of work, that in a similar way could be performed on the employer's work floor, but that is performed on either a regular or an incidental basis outside that work floor by using information technology”. This widespread way of working from home generates additional costs incurred by the employee, such as depreciation of part of the immovable property, electricity, heating, office supply, etc. In case the employer would reimburse these costs to its employees, these can be considered costs proper to the employer, free of tax and free of social security contributions. Furthermore, the employer can also opt to reimburse these costs on a lump sum basis, but is then required to obtain prior approval from the Ruling Commission.
During the past months, the Covid-19 crisis has given a significant boost to telework. Due to the containment measures, many employees could not travel to their workplace and were forced to work from home to protect themselves against the Covid-19 virus. Employers drafted (new) policies for “office@home” or revisited them in order to facilitate the new way of working. Also the government was aware of this shift to telework, and the Ruling Commission installed a simplified straight forward procedure to apply for a ruling for office@home allowances for the teleworkers during the Covid-19 measures.
This so-called FAST TRACK procedure for the office@home allowances was designed to obtain approval in a short notice on the lump sum allowance of maximum EUR 129,48 per month (indexed amount as of April 2020). Due to the simplified procedure (formal but shortened application, temporary nature, collective character,…), the Ruling Commission was overwhelmed by a wave of formal requests on the one hand, but at the same time also by various new interpretation questions.
As result of this success and given the rise of new way of working (“telework”), the government issued now a Circular letter (Circulaire 2020/C/100 dd 14 July 2020) stating that in certain specific situations NO approval from the Ruling Commission is required anymore.
Given the various positions that were taken in the past on the interpretation of working on a “regular and structural basis” from home, the Circular letter now explicity determines that one should work at least 5 days per month at home in order to be eligible for the maximum amount of EUR 129,48 per month free of tax and social security.
Furthermore, the Circular letter specifies that office@home allowances are deemed to cover the costs related to the installation and use of the office at home of the employee, printer and computer supplies, office supply, utilities (heating, electricity), maintenance, insurance, property tax, etc.
The Circular letter also clarifies certain specific situation when granting a lump sum office@home allowance:
- The maximum amount of EUR 129,48 is applicable to every employee that meets the conditions. Therefore no pro rata is needed for an employee that works part-time, as long as the employee still performs at least 5 days per month from home.
- No distinction between categories of employees anymore: every employee that meets the conditions, receives the same amount of maximum EUR 129,48.
- A pro rata is to be applied on the office@home allowances for employees in a salary split situation.
- Regular vacation has no impact on the granting of the office@home allowance. Absence for a longer period will have an impact and therefore the allowance should be pro rated.
No pre-approval required from the Ruling Commission?
It is clear that as long as the general conditions are fulfilled for office@home, no pre-approval is required anymore from the Ruling Commission (nor a fast track ruling, nor a regular ruling).
However, there are various situations whereby a pre-approval is still required:
- The employee(s) do(es) not fulfill the general conditions, though the employer still wants to grant a certain amount of office@home allowance up to max. EUR 129,48 as cost proper to the employer.
- The employer prefers to make a distinction between different categories/functions by granting different office@home allowances depending on the category/function of the employee(s).
- The employer prefers to reimburse additional office expenses not covering the office@home allowances as listed in this Circular letter.
- The employer would like to apply also other lump sum costs proper to the employer such as car (parking, car-wash, garage) and representation allowances.
If you have any questions about this Circular letter or you require any support for lump sum costs proper to the employer, please do not hesitate to contact us.
EY can also provide assistance with the implementation of any telework policy or any broader exercise of new way of working.