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Home-Office Expenses – Decree-Law No. 292-A/2023 of September 29th

Decree-Law No. 292-A/2023 of September 29th was published, introducing the framework for expenses incurred in a telework context within the scope of Personal Income Tax (IRS) and Social Security.

Following the various amendments to the Labor Code and other legislation regarding expenses incurred in telework, the Government has defined the limits of tax exemption within IRS and the contributory base within Social Security applicable to the amounts paid by employers to their employees to compensate for the burden of such expenses (when goods and services are not provided by the company).

The compensation paid to employees in a telework regime (in addition to constituting a cost in the employer’s sphere) will benefit from a tax exemption in the amount of €1 per day – or €22 per month, considering 22 working days – corresponding to the sum of the following items:

i) €0.10 to compensate for additional electricity costs;

ii) €0.40 to cover personal internet costs; 

iii) €0.50 for the use of personal computer equipment (e.g. computers).

In cases where there are collective bargaining agreements, the above limits will be increased by 50%, totaling €1.50 per day / €33 per month.

These values are only applicable to full days of telework, effectively provided and resulting from a written agreement between the employer and the employee under the terms of article 166 of the Labor Code.

The Decree-Law came into force on October 1, 2023, and can be consulted here.

Simplifinance is, of course, available to provide any clarification regarding this matter.

Conclusion:

This decree-law sets new rules for tax exemptions on expenses related to telework in Portugal. Employers can now reimburse employees up to a certain amount for additional expenses incurred while working from home, such as electricity, internet, and computer equipment. The specific amounts are defined in the decree-law and can be adjusted based on collective bargaining agreements.

Key points:

  • Tax exemption: Employers can reimburse employees for telework expenses up to a certain daily limit without the employee being taxed on this amount.
  • Covered expenses: The reimbursement can cover expenses related to electricity, internet, and personal computer equipment.
  • Daily limit: The daily limit is €1, but it can be increased to €1.50 if there’s a collective bargaining agreement.
  • Conditions: The reimbursement is only applicable for full days of telework and requires a written agreement between the employer and the employee.

In essence, this decree-law provides a clearer framework for handling telework expenses in Portugal, benefiting both employees and employers.