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Reimbursement of remote work expenses and personal income tax in Poland

Written by
Raczkowski largest boutique firm focusing on HR law.
Employers should reimburse their employees for the costs of remote work they incur, but this has implications for personal income tax (PIT) liability. This article explains.  

Employers are responsible for organising the overall process of work, also for organising work stations and providing the necessary equipment for employees to work. For that reason employees are not duty-bound to use their own tools and equipment when doing their jobs, and this includes remote work.

The regulations on countering COVID-19 do not govern the reimbursement of the expenses of remote work

Thus far the regulations of the special law have not introduced any solution to cover the incremental costs incurred by employees due to working remotely. That is why the rules in place until now should be referenced.

The costs of remote work should be refunded by employers according to general rules

The costs incurred by employees in connection with working remotely should be reimbursed just like other business expenses based on evidence they have incurred them.

Employees applying for reimbursement should present credible evidence of having incurred costs and substantiate their connection with the work they do, if requested. The cost reimbursement may also include the elevated consumption of utilities.

If employers refund the costs of buying the equipment needed to work remotely, then this equipment should in principle become part of their assets. If employers decide to give the equipment to their employees, then the value of that equipment should be treated as income received by the employees.

Tax exempt equivalent

The Personal Income Tax (PIT) Act contemplates a tax exemption for cash equivalents paid to employees for the tools, materials and equipment they own and use to do their work.

We would like to point out that an equivalent is the amount corresponding to the costs employees actually incur. For that reason, it is important for employers who intend to apply this exemption to be diligent in checking the expense employees incur when they use their private equipment for business purposes.

An equivalent should not include the elevated costs of consuming utilities, Internet access and the coffee and tea employees consume when they do remote work.