5% Tax For Working From Home? This Bank Wants Extra 5% Tax From WFH Employees
According to the Deutsche Bank Research, a tax of 5% of a worker’s salary should be applied if workers choose to work from home when they are not forced to by the current pandemic.
Tax On Salary For Work From Home
On Tuesday, German multinational investment bank and financial services company, Deutsche Bank said that people who are choosing to work from home rather than in an office should be taxed 5% of their salary, with the money used to support people on low incomes who cannot do their jobs remotely.
Further, the reports said that the employers should pay the tax if they don’t provide staff with a permanent desk.
Or staff should pay it out of their salary for every day they work from home.
If applied then this tax is expected to raise $49 billion per year in the US, 20 billion euros ($23.6 billion) in Germany and £7 billion ($9.3 billion) in the UK, as per Deutsche’s calculations.
This raised money will help in funding the subsidies for low-income earners who cannot work remotely.
Further, the report argues that this is fair as the people who are working from home are saving their money and not paying into the system like those who go out to work.
Tax On Remote Workers
Deutsche Bank strategist Luke Templeman said, “For years we have needed a tax on remote workers,Covid has just made it obvious,”.
The reports said, “Quite simply, our economic system is not set up to cope with people who can disconnect themselves from face-to-face society,”.
The workers in the US will now spend 4.6bn days a year at home instead of the office, according to the Deutsche Bank Research prediction.
In the case of the US, 5% work-from-home (WFH) tax on an average $55,000 salary works out at about $10 a day.
While, the tax equates to about £7, based on a salary of £35,000 for the UK.
“Those who can WFH receive direct and indirect financial benefits and they should be taxed in order to smooth the transition process for those who have been suddenly displaced,” the reports said.
During the Covid-19 spread, millions of people have shifted to working from home as employers closed offices to contain the spread.
A few big employers went ahead on allowing permanent work from home for some of the staff to either full-time or part-time once the pandemic is over.