Work From Home Expenses for Income Tax Relief

We left about two more weeks to file our Income tax for Year of Assessment 2022. If we did not file our income tax return by 15 April (for paper returns) or 18 April (for e-filing), we maybe fine up to S$1,000 among other actions that can be taken by IRAS. It is mandatory for companies with more than 5 employees to be in the Auto-inclusion scheme. This scheme will require the employer to  will submit their employees’ employment income information to IRAS. As an employee, we just have to verify the information, declare any additional income such as rentals or other part-time income as well as our relief and expenses.

Working from home is a common sight since the pandemic and we all know working from home usually meant we worked longer hours as there is no lunch time or “knock off” time. Most people actually work through these hours. However, working from home has its advantages too. For example, without having to wake up early and travel to office. The percentage of those who prefer to work from home and those who are prefer to return to office is quite balance. One thing for sure is working from home or flexi work will be a normal practice even after the pandemic.

A concern for many employees is the increase in electricity bills due to working from home. This could be due to turning on the aircon, charging of laptop and other equipment meant for work when they stayed at home. Did you know that these increase can be claim as expenses while you file for income tax?

Let us look at what is claimable! First, these expenses must be ‘wholly and exclusively’ incurred in the production of your employment income in Singapore. In order to claim these employment expenses, it must satisfy all the following conditions

  1. Incurred while carrying out your official duties;
  2. Not reimbursed by your employer; and
  3. Not capital or private in nature.

If you are required by your employer to work from home and the resulting home office expenses such as electricity charges and telecommunication charges are not reimbursed by your employer, you may claim these expenses that are incurred for work purposes as a deduction against your employment income for the year. As it may be difficult to calculate the exact amount of the running expenses that you have incurred as a result of working from home, IRAS has the following guidelines.

Let’s take an example of a household electricity bill was $150 per month. After work from home, the electricity bill increased to $200. The difference of $50 can be claimed as employment expenses.

If there are more than one person working from home in the same household, the difference will be shared among the number of people on apportionment basis. For example, if both the husband and wife are working at the same household, each will be claiming $25 ($50/2) out of the $50 increased in electricity bill.

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