Tax time has been a little different this year, with a significant proportion of employees working from home.
Even though the end of the financial year has been and gone, many businesses did not have time to set up a process for reimbursable at-home expenses with their staff — largely because of the scramble to transition employees to home-based work while maintaining productivity.
However, your employees may have a right to have certain expenses reimbursed by you if those expenses were required to carry out their job and had to be purchased by the employee to work from home.
It is important to have a reimbursable expenses plan in place and be transparent with your employees about this so that they know what items they can be reimbursed for. Ask your team to retain all receipts so that you can see which items were solely for work use, and which were partly work use or partly personal.
I also strongly advise setting up a reimbursable expense policy and be transparent about everything that your employees can write off as a business expense. Without one, it could be hard to decide if specific payments are valid for reimbursement, potentially leading to unwanted disputes with your employees.
There are no concrete rules for expense reimbursements — the following is a guide. Many employers choose to be very generous, while others choose to retain ownership of some larger items they reimburse their employees for, such as PCs or other high-cost hardware.
Here are five common work-from-home expenses your employees might seek reimbursement for:
1. Internet and mobile data. If employees can show you that they had to go on a higher-cost plan to enable them to work from home effectively, it would be reasonable for you to reimburse them for the difference between the two plans.
2. Phone calls. If your employee has a client-facing role and requires a lot of phone use to enable them to do their job, it is reasonable for them to expect you to cover those expenses. This could be by way of a flat “disbursement” fee of, say, $50–$100 a month, which is easy for both you and your employee. Or you could ask employees to present their work-related call costs on their phone bills.
3. Software subscriptions. It is reasonable for employees to expect their employer to reimburse them for software they purchase on a work computer they take home if they need that software to do their job effectively. Similarly, you should reimburse them if the software was installed on a home computer for the sole purpose of work.
4. Accessories such as laptop, cables and mouse, and stationery. If your employees were required to purchase essential office supplies and computer accessories to carry out their job at home — and those items will not be for their personal, long-term use — you should reimburse them for that expense. However, as an employer, you don’t need to reimburse your staff for items deemed non-essential or for personal use, which may or may not include a second PC monitor, cables for home printers, or a laptop that employees will keep at home.
5. At-home alcohol and snacks for your Zoom team socials. You might have purchased wine and snacks for office socials, out of goodwill. Even though these items are more of a luxury, rather than a necessity for employees to do their job, you might still choose to allocate funds — or reimburse employees for these items as a way to boost team morale during this difficult time.
Helen Baker is a financial adviser, author, speaker and spokesperson for online finance information platform money.com.au.