A work from home allowance is paid by an employer to an employee to help cover some of the costs incurred by working at home. Companies can choose to issue the payment on a monthly basis as part of a worker’s payslip, or as an annual lump sum. Anyone who works from home for at least part of their week is eligible for a work from home allowance, but a company can choose whether or not to offer it.
In the UK, companies can offer workers an allowance of £6 per week or £26 per month without the employee having to provide evidence of expenses. An employer can choose to offer a higher allowance but in this case the employer must provide evidence of expenses.
Do you pay tax on a work from home allowance?
No. You don’t pay tax or National Insurance on a work from home allowance. The only exception to this is if you receive a higher amount than the £6 standard and do not provide evidence for your expenses.
What is the work from home allowance for?
The work from home allowance is intended to contribute to broadband, utility bills and other costs of using your own home as an office. For employers, a work from home allowance can be a desirable benefit to attract new talent.
What if an employer doesn’t offer a work from home allowance?
Employers don’t have to offer an allowance. Workers may be eligible instead to claim work from home tax relief directly from HMRC.
The Hattie 