Typically, you would not think there was a direct correlation between HR and rising energy costs. However in the new post-pandemic era of hybrid working, employers and employees alike have to consider cost-cutting measures to reduce rising energy prices.

What’s the link between HR and the Rising Energy Costs Crisis?

As living costs dramatically increase across the UK and Ireland, complications will inevitably  arise for those employees who shifted to remote or hybrid working during the course of the pandemic. When remote working, employees are naturally using more of their electricity resources during working hours, including appliances, lights and central heating. Similarly, those employees who work full-time in the office will significantly contribute to an organisation’s increasing energy costs, especially during the winter months.

What will Rising Energy Costs mean for Remote Working employees?

Rising energy costs may force the majority of remote working employees to shift back to full-time working in the office in a bid to get their energy costs down. As a result, many employers could see a significant shift back to remote working or at the very least, lead to more seasonality in how people want to use the office versus wanting to work from home.  Despite the lack of commuting costs being a major factor in remote working, research has suggested that employees will still save costs going into the office due to the surge in energy costs.

What can Employers do to help employees with Rising Energy Costs?

If they are in a position to do so, employers could offer full-time remote employees a subsidy payment towards their energy costs to benefit employee morale in a financially challenging period. Additionally, employers could create incentives for employees to return to full time in-office or hybrid working to reduce their home energy costs. Employers should be as flexible as possible with their remote working policies at this challenging time, and prioritise employees’ well-being as we approach the winter months. However, it could be said that many employers will embrace the majority of their employees being back in the office after experiencing difficulty luring their employees back to the office after the introduction of remote working during the pandemic. 

Is there any Tax Relief offered to Remote Working employees?

Yes, in Ireland remote working employees or hybrid employees, employers can pay employees up to €3.20 per day without deducting PAYE to cover the additional costs of working from home. Employees won’t have to pay Universal Social Charge (USC) or Pay Related Social Insurance (PRSI) either. However, employers are not legally obliged to make this payment but can offer it as a benefit. 

If employees do not receive working from home allowances from their employer, they can claim Remote Working Relief from Revenue.ie. This entitles employees to tax relief on their electricity, heating and broadband for the days they spend working from home if they claim expenses directly from Revenue.ie.

The 2022 rates are:

  • 30% for electricity & energy
  • 30% for broadband