working from home determination, person with laptop on floor with cat and papersThe IRD has issued a determination (EE002) for employers who are paying employees working from home costs during the COVID-19 crisis. It provides that employers can pay employees who are working from home up to $20 per week tax-free for expenses (for example additional heating costs) without needing to estimate or demonstrate the employee’s actual expenses.

Additionally, employers can make a tax-free payment of up to $400 per employee for furniture or equipment without the need to work out actual expenses.

The working from home determination is a temporary response to the COVID-19 crisis and applies only to payments for expenses incurred between 17th March 2020 and 17th September 2020. It does not suggest that employers must make any expense payments to staff who are working from home.