[Singapore] The case for employers reimbursing WFH expenses

Since April 5, an increasing number of employees have been able to return to the office as workplaces in Singapore moved to a more flexible way of working. Following the announcement of the easing of restrictions, many expressed concern that it signalled an eventual return to pre-COVID working arrangements.

However, public discourse, surveys and the actions of employers have shown that this to be unlikely. Many employers have continued allowing their employees to work remotely and others have implemented hybrid and flexible work arrangements, letting employees work remotely for a certain number of days a week.

According to a recent Deloitte report, over the course of years, Singapore could have a potential remote workforce of up to 45 per cent across all sectors. Reduced real estate, travel and infrastructure costs are key drivers of this phenomenon. Considering these cost savings, CNA makes the case that employers should now begin channelling funds to enable their employees to work effectively from home.

Several companies began doing exactly this soon after work-from-home (WFH) arrangements began across the globe. In March 2020 E-commerce company Shopify - employing 5,000 people worldwide with the majority of its workforce in Canada - announced that its remote employees would receive $1,000 to set up their new home office.

Twitter also gave its teleworkers $1,000, to make this transition easier, and various other companies have since announced allowances for phone and internet bills. Other Singapore companies have reportedly begun to at least partially subsidise remote employees’ utility bills and intend to continue doing so.

The argument could be made that because people who WFH save money, for example, in commuting costs, employers should not have to reimburse their other costs. The rationale being that employees can apply cost savings in certain areas to cost increases in others. 

In June 2020, the Inland Revenue Authority of Singapore announced that workers who incurred WFH expenses last year may claim tax deductions against their employment income in this year’s income tax filing. This covers expenses such as electricity and telephone bills if they are not reimbursed by employers.

There are limitations though. Those who had already set up wi-fi routers prior to working from home will not be able to make claims and one-time charges like installation or connection fees cannot be claimed, as they are “capital in nature”.

Principle and practicality

Putting aside tax deductions and employees’ cost savings on other fronts, CNA makes the case that companies need to seriously consider reimbursing their employees as a matter not only of principle but also practicality.

If the argument is that employees are already making cost savings in other areas - and therefore do not require additional employer support - then the counter-argument could be that companies are making further savings through remote working; in physical location costs like rent, transport allowances and other investments in staff welfare such as pantry supplies and meal vouchers.

By channelling these savings to more currently relevant benefits for employees - like Wi-Fi and electricity allowances - employers will guarantee they have everything needed to be productive at home. Additionally, the gesture will be good for employee morale and send an important signal that employers are sincere in their wish to make WFH a comfortable, feasible and long-term prospect. CNA offers further analysis of the question.

Since April 5, an increasing number of employees have been able to return to the office as workplaces in Singapore moved to a more flexible way of working. Following the announcement of the easing of restrictions, many expressed concern that it signalled an eventual return to pre-COVID working arrangements.

However, public discourse, surveys and the actions of employers have shown that this to be unlikely. Many employers have continued allowing their employees to work remotely and others have implemented hybrid and flexible work arrangements, letting employees work remotely for a certain number of days a week.

According to a recent Deloitte report, over the course of years, Singapore could have a potential remote workforce of up to 45 per cent across all sectors. Reduced real estate, travel and infrastructure costs are key drivers of this phenomenon. Considering these cost savings, CNA makes the case that employers should now begin channelling funds to enable their employees to work effectively from home.

Several companies began doing exactly this soon after work-from-home (WFH) arrangements began across the globe. In March 2020 E-commerce company Shopify - employing 5,000 people worldwide with the majority of its workforce in Canada - announced that its remote employees would receive $1,000 to set up their new home office.

Twitter also gave its teleworkers $1,000, to make this transition easier, and various other companies have since announced allowances for phone and internet bills. Other Singapore companies have reportedly begun to at least partially subsidise remote employees’ utility bills and intend to continue doing so.

The argument could be made that because people who WFH save money, for example, in commuting costs, employers should not have to reimburse their other costs. The rationale being that employees can apply cost savings in certain areas to cost increases in others. 

In June 2020, the Inland Revenue Authority of Singapore announced that workers who incurred WFH expenses last year may claim tax deductions against their employment income in this year’s income tax filing. This covers expenses such as electricity and telephone bills if they are not reimbursed by employers.

There are limitations though. Those who had already set up wi-fi routers prior to working from home will not be able to make claims and one-time charges like installation or connection fees cannot be claimed, as they are “capital in nature”.

Principle and practicality

Putting aside tax deductions and employees’ cost savings on other fronts, CNA makes the case that companies need to seriously consider reimbursing their employees as a matter not only of principle but also practicality.

If the argument is that employees are already making cost savings in other areas - and therefore do not require additional employer support - then the counter-argument could be that companies are making further savings through remote working; in physical location costs like rent, transport allowances and other investments in staff welfare such as pantry supplies and meal vouchers.

By channelling these savings to more currently relevant benefits for employees - like Wi-Fi and electricity allowances - employers will guarantee they have everything needed to be productive at home. Additionally, the gesture will be good for employee morale and send an important signal that employers are sincere in their wish to make WFH a comfortable, feasible and long-term prospect. CNA offers further analysis of the question.