Teleworking generates several additional costs for the employee (purchase of office supplies, heating, electricity, Internet, telephone, etc.). The reimbursement of the costs incurred by the teleworking employee is exempt from social security charges for companies. How to calculate the telework allowance? What expenses can be exempted? What are the tax exemption limits?
Telework compensation: what is the employer's obligation?
Since the order of September 22, 2017, the employer's coverage of teleworking expenses is no longer mandatory. Because of the health crisis, new measures have been taken and the Ministry of Labor, Employment and Integration had published a guide to teleworking during the March-April 2020 containment, stating that "The employer is not obliged to pay his employee a teleworking allowance intended to reimburse him for the costs arising from teleworking, unless the company has an agreement or charter that provides for it".
In November 2020, article 3.1.5 of the ANI stipulates that: "The principle that expenses incurred by an employee in connection with the performance of his employment contract must be borne by the employer applies to all work situations. As such, it is the responsibility of the company to cover the expenses incurred by the employee for the needs of his professional activity and in the interest of the company, after validation by the employer", provided that the employer's validation is interpreted as being prior to, and not subsequent to, the employee incurring the expenses.
On April 13, 2021, the ANI was extended, and its article 3.1-5 stipulates that it is up to the company " to cover the expenses incurred by the employee for the needs of his professional activity and in the interest of the company, after validation by the employer. The choice of methods for covering professional expenses may, where appropriate, be the subject of social dialogue within the company ".
Expenses incurred by telecommuting employees can in fact be considered as expenses incurred for the needs of their professional activity. Covering these expenses is advantageous for the company, as part of the cost is tax-exempt.
The employer may therefore bear some of the costs associated with teleworking, in the form of a reimbursement of actual expenses or a teleworking allowance.
How do you pay your employees their teleworking allowance?
There are two ways in which the employer can reimburse the employee's telework-related expenses:
- Reimbursement for each expense incurred;
- In the form of a monthly lump sum payment.
How to calculate the telework allowance?
Urssaf specifies that the amount of the lump-sum allowance varies according to the number of teleworking days per week: the employer pays €13 per month per employee for one day of teleworking per week, €26 per month per employee for 2 days of teleworking per week, and so on, up to a maximum of €71.50 per month for employees who telework 5/7 days a week.
If the employer pays its employees a lump-sum allowance to cover their teleworking expenses, this may be tax-exempt up to a limit of 2.60 euros per day of teleworking, representing an exemption of 57.20 euros for a month comprising 20 days of teleworking.
When the lump-sum teleworking allowance is set on a daily basis, it is deemed to have been used for its intended purpose and is exempt from social security contributions if its daily amount does not exceed 2.60 euros, up to a maximum of 57.20 euros per month.
The employer may pay less than, equal to or more than the amount set by Urssaf. The law does not require the employer to pay a specific amount, but the exemption is always within the limit.
According to Urssaf, "if the lump-sum allowance is provided for in a branch collective agreement, a professional or inter-professional agreement or a group agreement, it is deemed to be used in accordance with its purpose and exempt from social security contributions up to the amounts provided for in the collective agreement". This means that the company will not have to justify telecommuting expenses if they are mentioned in the agreement. Note that if the company reimburses expenses in excess of the flat-rate teleworking allowance, receipts are required to claim exemption from social security contributions.
The employer indicates the amount of the telework allowance paid in the information sent to the tax authorities. The employee will be able to verify the amount of the allowance received when declaring his income by checking the amounts in his pay slips or in the annual tax certificate issued by his employer.
Teleworking allowance: which expenses qualify for additional tax exemption?
Expenses incurred by teleworking employees are considered as business expenses and can be presented in three categories:
- fixed and variable costs related to the provision of private premises for professional use;
- costs related to the adaptation of a specific room;
- the cost of computer equipment, connections and various supplies.
Other business expenses may be allowed, provided that the employer can demonstrate that they are business expenses related to telework.
If the employer reimburses the expenses incurred by his employees in excess of the amount set by Urssaf, the exemption from social security contributions may be allowed subject to proof of the expenses actually incurred by the employee.
The following are some examples of theassessment of business expenses related to teleworking that may be subject to this exemption:
Fixed costs
Rent (amount of rent or, in the absence of rent, gross rental value), council tax, property tax on built-up properties, regional, departmental or communal taxes such as household waste collection tax, condominium charges and comprehensive home insurance.
Example of fixed expenses: 80 m² apartment, 10 m² of which is used for business purposes, rent = 400/month, council tax = €40/month and insurance premium = €15/month. The amount of deductible expenses is prorated to the amount used for business purposes, and comes to 455 x 10 / 80 = €56.875.
Variable costs
Heating and/or air conditioning and electricity. The assessment is made on a pro rata basis according to what is actually consumed by the business premises.
Office supplies: when furniture (such as a desk, ergonomic chair, desk lamp, shelving, etc.) is purchased by the employee on behalf of the company (the employee remains the owner), the costs reimbursed by the employer are exempt from social security contributions up to a limit of 50% of the actual expenditure, on presentation of supporting documents.
Computer hardware and peripherals
When purchasing a computer, printer, etc., the expenses reimbursed by the employer are exempt from social security contributions up to a limit of 50% of the actual expenditure, on presentation of supporting documents.
Consumables
Ink cartridges and reams of paper, etc. Expenses reimbursed by the employer are exempt from social security contributions, subject to proof of costs incurred.
Telecommunications
Telephone network connection costs and subscription fees (telephone, Internet, etc.) are reimbursed and exempt from social security contributions on presentation of proof of costs incurred.
Worklife telework allowance
The Worklife solution allows companies to improve the conditions of telework for their employees. The Worklife card simplifies the implementation of the telework allowance:
- The company allocates a lump sum and finances between 50% and 100% of the expenses incurred by the employees;
- Employees pay for their office supplies directly with their Worklife card;
- The distribution of the employer's share and the employee's share is done instantly at the time of payment;
- No more receipts to manage! Worklife provides one certificate per month for all teleworking expenses, valid in the event of an audit.
