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Everyone has a home office now. So who's paying for it?

Everyone has a home office now. So who's paying for it?
PHOTO: Unsplash

NEW YORK - In the past, home offices were often an afterthought: Ill-equipped, cramped, and a little dusty from only occasional use.

Now in 2020, many home offices are looking more like the command centre at NORAD: Multiple screens, high-tech capabilities, and professional Zoom-ready surroundings.

And all that costs money.

Good thing about two-thirds of companies are providing or reimbursing for needs of newly remote workers, according to a survey by HR consultancy Mercer: 55 per cent are covering laptops, 33 per cent mobile phones, 26 per cent printers and 24 per cent ergonomic equipment.

Only 32 per cent of companies said they were not helping out with those costs.

“The shift to working remotely means many employees are now having to ask their firms to cover costs associated with setting up and maintaining a home office,” says Kathleen Burns Kingsbury, a wealth psychology expert and author of “Breaking Money Silence.” “This has many looking for best practices, for engaging in a home-office expense negotiation.”

Of course, we are in a new and fluid situation, and companies as well as employees are learning as they go.

The questions on most people’s minds: What exactly can you get reimbursed for? What can you deduct on your taxes? And how do you make an airtight case to your boss for things you think your company should really be paying for?

When considering the costs of a home-office setup, here are some issues to keep in mind.

Dust off your negotiation skills

A woman works in a house while workers are forced to work from home and demand payback for extra home office costs during the coronavirus disease (Covid-19) outbreak in Sassenheim, Netherlands, on October 2, 2020.
PHOTO: Reuters

Getting reimbursed for home-office expenses is not always a black-and-white issue – your bosses may need some convincing. So “think like the CFO,” advises Kingsbury. “Tie your request to an increase in productivity and revenue if at all possible.”

Do not try to bust their budget completely, with only top-of-the-line equipment, but give them a range of different options to choose from. And if you do get an initial ‘No’ ask what would have to change for your request to be granted, Kingsbury says. “Then work towards a second ask in a month or two,” she adds.

Pick up your battles

A man works in his kitchen while workers are forced to work from home and demand payback for extra home office costs during the coronavirus disease (Covid-19) outbreak in Sassenheim, Netherlands, on October 2, 2020.
PHOTO: Reuters

Not every cost is going to get covered by your employer, so instead of aiming for the moon and asking for everything, focus on the items where you have the best rationale for financial support.

For example, in the Mercer survey, only 4per cent of companies report helping out with the cost of home utilities – so that area may not represent your best chance of success.

In comparison, according to a new survey by the nonprofit organization WorldatWork, 25per cent of companies are covering Internet access for work-from-home employees – which could be a big help on a monthly basis.

Consider tax issues

For salaried employees, your best route is to get employers to pay for home-office equipment and supplies up-front, or to get reimbursed for them.

Under current tax law, such employees are not allowed to deduct those out-of-pocket expenses on their own taxes come April 15, says Michael Hennessy, a financial planner with Harbor Crest Wealth Advisors in Fort Lauderdale, Florida.

ALSO READ: The real cost of working from home may surprise you

If you are not a salaried employee, however – maybe you are a solo entrepreneur who does a variety of contract work, for instance – those rules do not necessarily apply.

“As long as you are self-employed and part of your home is used for business use, you can take advantage of the home office deduction,” Hennessy says. That way a percentage of related costs like mortgage interest, insurance, supplies, utilities and repairs will be deductible.

Think beyond tech

A laptop and an Internet connection are the most obvious building blocks for a work-from-home setup. But other elements are important, too, like the chair you sit on for multiple hours a day.

Among organisations that transitioned to full-time work-from-home arrangements during the pandemic, 27 per cent are offering company group discounts on furniture, 21 per cent are providing it directly, and 18 per cent are supplying a stipend, according to a survey by office furniture giant Steelcase.

“We believe we’ll see even more company support over time,” says Caroline Kelly, a research manager at Steelcase. “Employee expectations are changing right now, and companies are navigating their way through them.”

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