An insight into home office expenses in France.
Home office is becoming more and more popular in France, not only since COVID-19. For an employment package to be attractive and competitive, employers will have to offer employee benefits, including flexible working arrangements such as home office.
Before setting up home office, it is advisable to ensure that both parties, employer and employee, are aware of the financial implications in regards to expense reimbursements.
Home Office Expenses: Lump Sum vs. Actual Expenses
The employer can reimburse home office expenses in the form of a lump sum allowance, fully exempt from contributions, or on the basis of actual expenses upon receipt.
The lump sum allowance is €10 per day of home office per week. For instance, an employee working four out of five days from home office can receive a lump sum allowance of €40 per month.
Alternatively, the employer can reimburse the costs actually incurred by the employee. In this case, the refunds paid will only be exempt from social charges if proof like receipts is provided.
In either case, the refund must be mentioned on the French payslip.
Home Office Expenses in France: reimbursement of actual expenses
In many cases, the actual expenses will exceed the lump sum allowance. So in order to benefit from the maximum exemption of social contribution and taxes, it can be favorable to process refunds based on actual expenses.
Expenses related to Home Occupancy
The employee is entitled to an allowance for occupation of his home for professional purposes when one of the following cases applies:
– home office has been imposed by the employer;
– the employer doesn’t provide an office space.
The home occupancy expenses are evaluated based on the proportion of space used for home office.
Example of home occupancy expenses in France
|Example||Professional usage||Basis of the calculation of the reimbursement||Reimbursement|
|Rental value: €1000/month
Taxes, insurance etc: €1200/year
|Apartment of 100 squaremetres,
of which 10 squaremetres are used for home office
|Average monthly expenses: €1100,
10 % professional use
|€110 per month|
On top of this, variable costs like electricity and heating can be refunded, for the share assigned to professional use.
As a rule of thumb, the employer is responsible for supplying the equipment such as a laptop.
A particularity is the case where the employee buys equipment on behalf of the company while remaining the owner. In this case the employer can reimburse up to 50% of the actual expenses based on receipts.
Example: The employee buys a table and chair for his home office setup of a total value of €1500. The employee and employer agree that the employee will remain the owner. In this case, the employer can refund €750 exempt from contributions and taxes.
Broadband and Phone package
For mobile and Internet subscriptions, the reimbursement can be exempt from social contributions based on proof of expenses actually incurred, for the professional usage.