The rising electricity costs once again turns our attention to the rules and regulations applicable to employees working from home. As we spend more and more time at home, there are certain benefits and expenses to keep in mind. In this article, we have gathered and updated the very latest in rules and regulations important for employees currently working from home.
Working from home in Sweden
We can with certainty say that there are small opportunities to receive deductions of expenses for employees working from home, but there are, however, good opportunities for employers to bear some of these costs in other ways - as long as the tax rules are handled correctly. This is how the laws work in Sweden.
Remuneration and deduction of expenses
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If an employer makes a contribution to an employee's private purchase, for example of an office chair or a height-adjustable desk, the contribution becomes taxable salary. The employee is thus taxed for the compensation and the employer must pay employer contributions. At the same time, the office chair or desk becomes, of course, the employee's private property.
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If the employer is responsible for the purchase itself, the assessment may be different. The employer then makes the purchase directly or replaces the employee against the submission of a receipt.
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Equipping an office for an employee who works from home by lending out suitable office furniture does not normally have any tax consequences. All the equipment that an employee needs to be able to perform their work from the home office can be treated as tax-free work tools. These can be, for example, headsets, printers, computer screens and webcams. The prerequisite for tax exemption is that the work tool is important for the employee to be able to perform his or her duties. However, it does not have to be directly necessary for the work.
- In order for it to be a question of a tax-free work tool, it is also required that it is the employer who owns or leases the tool in question.
Remuneration to employees for own broadband
- Remuneration from employers to employees who use their own private broadband when working from home is taxable as salary.
- However, the Swedish Tax Agency has opened up an opportunity for employees' own broadband connections to become tax-free as a work tool. This applies if the employer agrees with the telecom operator to become responsible for payment for the employees' own subscriptions. The operator then invoices the employer for both the subscription and the ongoing fees.
Working from home in Norway
Remuneration and deduction of expenses
- Remuneration to the home office can be covered if: There is a need for a home office, and there is a separate room used exclusively for home office.
- The Directorate of Taxes has specified that it is not possible to provide any remuneration where "combined rooms" are used, e.g. where the employee uses a bedroom or sits in the living room.
- The employee prepares an expense statement and up to the standard amount of NOK 1,850 can be covered. Alternatively, actual expenses connected to the home office can be covered, if this can be specified. These could be parts of electricity expenses, rent, communal fees, etc, which can be traced back to the use of a home office. This may be a better alternative presently, due to the rising electricity expenses. Any government support of electricity costs must also be taken into account.
- The expense statement must include the employee’s name, address, a description of the expenses, and their signature. The employer is required to guarantee that the expense allowance does not generate a profit. Here, the employer must ensure that the electricity subsidy is taken into account in the amount the employee requires.
- Tax exemption for home office must be reported in “A-Meldingen” as such:
Expense allowance - Other
No withdrawal obligation
No aga duty
“A-melding” number 1301, if this is entered in Visma Lønn
- If more is paid than the above, this is subject to deduction and tax and is reported as follows:
Expense allowance - Other
Withdrawal obligation
Aga duty
“A-melding” number 1301 if this is entered in Visma Lønn
Rules for office equipment
- The employer can lend equipment to the home office, e.g. PCs, monitors, office desks, chairs, lamps, etc. equipment that the employee needs.
- Computer equipment can be lent tax-free, when the placement is justified for business use. This applies regardless of whether a home office has been established or not.
- If "independent additional equipment" is lent out, this is in principle taxable, unless the main purpose of placements is for use in the work.
- When it comes to lending furniture to the home office, it is a clear precondition that the main purpose of lending this is due to the work in the home office. If the main purpose is of a private nature, for example if a "gaming chair" is lent out, the loan will quickly become taxable.
- What if the employee gets the equipment or buys it themselves? - The Directorate of Taxes states that in such cases there may also be a tax exemption as long as the main purpose is for use in the work. There are some factors that need to be considered in this context: The price of the equipment, suitable for private use, the nature of the equipment, e.g. how common it is to have this type of equipment in private households or whether it is equipment that is typically work-related, estimated duration and intensity of use of the equipment in a work context in the future.
- In the event of a refund, vouchers must then be submitted to the employer.
- It is not possible to give any tax-free allowance for equipment in the home office without it being legitimized with vouchers.
Mobile and broadband
In principle, the general rules for taxation of electronic communications apply here.
- That is, there will be a tax of up to NOK 4,392 per year for the subscriptions / services the employee needs. It is a prerequisite for the tax exemption that the expenses are documented with vouchers.
- For those who normally do not have an agreement on such coverage, but must have it in connection with the corona situation, the employer can cover this tax-free. It is a prerequisite that it is only a temporary scheme.
Read more about the Norwegian home office tax rules here.
Working from home in Denmark
Remuneration and deduction of expenses
- If the employee himself bears the expenses for the home office, there is unfortunately a very restrictive practice for the right to deduct in the area, and the employee will generally not be able to deduct expenses for the study, etc.
- In the very special cases where deductions have been granted in practice, emphasis has been placed on the fact that the room in question has changed character so that it is no longer usable as a living space.
- Where the employee is exceptionally entitled to a deduction, it should be noted that you can only deduct the expenses that exceed a lower limit of DKK 6,500. Any excess amount will be a so-called tax deduction. The best solution for the employee will therefore be for the employer to bear the costs of the home office.
Rules for office equipment
- As a general rule, the employee is not taxed if the employer makes, for example, an office chair, table, and lamp available for a home workplace. However, it is a condition that the furniture corresponds both in appearance and interior design as well as financially to what is in the company. You can therefore not install a home office with expensive designer furniture if the standard of the workplace is lower.
- Tax exemption for the employee thus presupposes that:
- The employer pays for the furniture
- This is furniture of at most the same standard as in the office in general
- The employer retains ownership of the equipment.
(Exception if furniture is taxed as employee benefits)
- If the Danish Tax Agency exceptionally assesses that the office equipment must be taxed, the taxable value will be the amount for which the equipment can be rented in ordinary free trade during the loan period.
- If the furniture for the home office is made available mainly for the sake of work, the de minimis limit applies to work-related employee benefits.
- The employee must state the amount himself if the value of the equipment exceeds DKK 6,500 per year. In the DKK 6,500, you must remember to recognize the value of any other employee benefits granted for the sake of the work. These can be, for example, vaccinations, free food and beverages in connection with overtime, etc.
- The value is taxed as B income. No labor market contribution of the amount is to be paid.
Mobile phone
- Free telephone, broadband and free car must not be counted in the DKK 6,500, as these are employee benefits that are always taxed.
Working from home in Finland
- The employee may be entitled to a workspace deduction if she is working from home. The deduction does not require that she has a separate room or space for working – It is enough that she is working from home.
- The amount of the deduction depends on how much she works from home. Note that €750 is automatically deducted from employee's wage income. The expenses can be accepted only if they exceed €750.
- There are two alternative ways of making a deduction: – Standard workspace deduction – Deduction calculated on the basis of actual expenses.
- If the employer pays money for the employee to compensate for workspace or furniture, the compensation is considered as normal salary.
Each country has its own set of rules, and it is up to the employer to ensure these are followed by their own employees. This article will give you a thorough understanding of what to keep in mind. Azets is dedicated to providing you with the tools you need to establish efficient remote workplaces in all Nordic countries, and our customer support are happy to help should you have further enquiries. Let us make your cross-country payroll processes seamless and efficient with our local knowledge.
