Flat rate expenses refer to costs incurred by an employee on items that are necessary to complete their work. This equipment may include tools, uniforms and stationery.

Your employee must incur these costs in performing the duties of their employment, and the costs must be directly related to the nature of their employment. Flat-rate expenses are available to a wide range of professions. You can find more details here:

• Flat Rate Expenses – pdf

The amount of the deduction is agreed between Revenue and representatives of groups or classes of employees (usually trade union officials). All employees of the class or group in question can then claim the agreed deduction in their own tax credits.

Flat rate expenses can be claimed by completing an Income Tax return. You can find this form in PAYE Services in myAccount. You can do this by following these steps:

• Sign into myAccount
• Click on ‘Review your tax’ link in PAYE Services
• Select the Income Tax return for the relevant tax year
• In the ‘Tax Credits & Reliefs’ page select ‘Flat rate expenses’ and add it as a tax credit.

Revenue concluded a comprehensive review of the flat rate expense allowances in 2019. The implementation of any planned changes to the flat rate expense regime has been further deferred until 1 January 2023. 

Revenue’s decision has been taken in light of the Minister for Finance, outlining that deliberations continue regarding policy options. These options are outlined in the Tax Strategy Group (TSG) Income Tax paper 21/02, on how the Flat rate expenses issue will be addressed.

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