Remote Work Expense Policies in Europe 2025: Tax-Free Allowances and Best Practices
Designing Tax-Efficient Remote Work Expense Policies Across Europe
Distributed teams spanning Germany, France, Spain, the Netherlands, Italy, and the UK require harmonized expense policies that respect local tax rules while supporting employee productivity. In 2025, governments continue refining guidelines for tax-free allowances, making proactive policy design essential.
Establishing Core Policy Principles
Create a regional framework covering eligibility, documentation standards, and approval workflows. Define expense categories such as home office setups, connectivity, coworking passes, travel to team meetings, and per diems for temporary relocations. Align policies with corporate sustainability and wellbeing goals.
Country-Specific Allowance Highlights
- Germany: Employers can reimburse €6 per home office day (max €1,260 annually) tax-free when remote work is required. Provide ergonomic equipment under occupational safety obligations to avoid taxable benefits.
- France: URSSAF allows €2.70 per day (capped at €59.40 per month) for remote work allowances without social charges, if employers collect evidence of remote days.
- Spain: Regular home office allowances must be stipulated in employment contracts; reimbursements for utilities and internet are tax-free when substantiated.
- Netherlands: Combine €2.35 per remote workday with €0.23 per kilometer commuting reimbursements under the WKR scheme.
- Italy: Expenses for internet, energy, and equipment are tax-free if documented; consider lump-sum agreements referencing the national smart working framework.
- UK: HMRC permits £6 per week tax-free for remote work expenses without receipts, or higher amounts with evidence. Reimbursing necessary equipment remains non-taxable if ownership stays with the employer.
Handling International Travel and Workations
Employees spending extended periods abroad can trigger tax residency and permanent establishment risks. Implement approval processes for workations exceeding 30 days and involve legal/tax teams to assess implications. Document employer approval and clarify responsibility for tax consequences.
Expense Management Technology
Adopt expense platforms with localized VAT handling, receipt digitization compliant with GoBD (Germany) and other regulations, and multi-currency support. Automate policy enforcement with category-based limits and approval hierarchies to maintain control.
Supporting Employee Wellbeing and Productivity
Beyond financial reimbursements, offer stipends for coworking memberships, mental health support, and ergonomic assessments. Encourage employees to submit workspace photos to ensure alignment with occupational health standards.
Auditing and Compliance
Perform semi-annual audits to verify adherence to tax rules and identify policy gaps. Maintain detailed records of allowances, signed remote work agreements, and supporting invoices for tax inspections.
Implementation tip: Launch a remote work expense handbook, integrate country-specific FAQ sections, and train managers to approve expenses consistently across jurisdictions.