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(2022) What can I deduct if my employer provides benefits for commuting to work?

Dieser Text bezieht sich auf die Steuererklärung 2022. Die aktuelle Version für die Steuererklärung 2024 finden Sie unter:
(2024): Was kann ich absetzen bei Leistungen meines Arbeitgebers für Fahrten zur Arbeit?

Does your employer pay you a tax-free travel allowance for commuting? 

In principle: Such an employer's allowance is taxable, but the employer can tax it at a flat rate of 15% (for the new regulation of a flat rate tax of 25%, see the note below). The amount taxed at a flat rate is exempt from social security contributions. The employer must note the amount taxed at a flat rate on the payslip, and you must enter this amount as travel expense reimbursement in your tax return (Form N, reverse side).

The tax office will accordingly reduce the deductible travel expenses and only recognise the remaining travel expenses as business expenses. If your employer provides you with a job ticket for travel, this is a benefit in kind. If the employer's contribution does not exceed 50 Euro per month, this amount is tax and social security-free.

New since 2019:

Since 1 January 2019, employer benefits - allowances and job tickets - for employees are tax and social security-free under the following conditions for the following journeys:

  • Journeys between home and first place of work,
  • Journeys to a permanent collection point specified by the employer (e.g. fixed meeting point, specific car park, bus or train depot, ferry port),
  • Journeys to a large-scale work area (e.g. forest area, port area, but not factory premises) in accordance with § 9 para. 1 no. 4a sentence 3 EStG.

(§ 3 no. 15 EStG 2019, introduced by the "Act to Avoid VAT Losses in the Trade of Goods on the Internet and to Amend Other Tax Regulations" of 11 December 2018).

Which means of transport are subsidised?

  • Employer benefits for the above-mentioned journeys of the employee with public transport in scheduled services, i.e. long-distance passenger transport (1st alternative). This only applies to employees in active employment and to temporary agency workers employed by the hirer. Private journeys are not subsidised. Long-distance passenger transport (public transport in scheduled services) includes long-distance trains of Deutsche Bahn (ICE, IC, EC), long-distance buses on fixed routes or routes with fixed stops, comparable high-speed trains and fast long-distance trains of other providers (e.g. TGV, Thalys).
  • Employer benefits for the above-mentioned journeys as well as for private journeys of the employee in local public transport (2nd alternative). This applies to all employees or temporary agency workers. The use of local public transport is subsidised regardless of the type of journey, i.e. also for private journeys of the employee. This means that - unlike in long-distance passenger transport - no further check on the type of use is required for travel authorisations that only allow the use of local transport. Local public transport includes the generally accessible transport of persons in scheduled services, which is mainly intended to meet the demand for transport in urban, suburban or regional traffic. For reasons of simplification, all public transport that is not long-distance passenger transport is considered local public transport. Insofar as taxis are used in scheduled services in accordance with the approved local transport plans (e.g. to increase, supplement or replace other public transport) and are included in the travel authorisation or may be used for a small surcharge, they are considered local transport.

 

Travel allowances for journeys with your own car are taxable from 2019, but the employer can tax them at a flat rate of 15%. The amount taxed at a flat rate is exempt from social security contributions (§ 40 para. 2 sentence 2 EStG). The travel allowance taxed at a flat rate does not increase the gross salary shown on the payslip. Only if the travel allowance is not taxed at a flat rate will it be added to the gross salary and taxed normally.

The flat rate taxation is only permissible if the allowance is paid in addition to the salary already owed and not if salary is converted into a travel allowance. However, it is often possible to pay travel allowances instead of a salary increase. 

The following means of transport are not subsidised:

  • buses or trains rented or chartered for specific occasions,
  • taxis in occasional services that do not operate on licensed routes,
  • air transport.

Which employer benefits are subsidised?

The tax exemption includes

  • employer benefits in the form of free or discounted travel authorisations (benefits in kind, job ticket),
  • employer subsidies (cash wages) for travel authorisations purchased by employees themselves.

Subsidised travel authorisations include single/multiple journey tickets, season tickets (e.g. monthly, annual tickets, Bahncard 100), general free travel authorisations, free travel authorisations for certain days (e.g. in the event of smog alerts) or discount cards (e.g. Bahncard 25).

Price advantages from third-party companies and group companies (subsidies and benefits in kind) that are granted in consideration of the employment relationship and would be treated as wages are also tax-free (according to BMF letter of 20 January 2015, BStBl. 2015 I p. 143).

Price advantages granted to employees by third parties are part of taxable wages if they represent a benefit of the employee's work for the employer and are related to the employment relationship, or if the employer has actively participated in obtaining these price advantages.

Such price advantages are tax and social security-free if the third-party company has a predominantly self-economic interest in granting the discount, the third-party company also usually grants the price advantage to third parties in the normal course of business, e.g. quantity discounts, or the granting of the advantage is in the overwhelming interest of the employer.

The monetary benefit of a job ticket is no longer offset against the 50 Euro exemption limit for benefits in kind. This benefit can now be used elsewhere (§ 8 para. 2 sentence 11 EStG). For employees of transport companies, the tax-free free travel authorisation is no longer offset against the personal discount allowance of 1,080 Euro (§ 8 para. 3 EStG).

If you receive a subsidy from your employer for commuting with your own car, the previous regulation remains in place, i.e. the subsidy can be taxed by the employer at a flat rate of 15% (§ 40 para. 2 sentence 2 EStG).

 

Since 1 January 2019, the employer can choose another form of flat rate taxation for job tickets and subsidies that are not tax-free under § 3 no. 15 EStG:

Taxation at a flat rate of 25%, but without reducing the travel allowance (§ 40 para. 2 sentence 2 no. 2 EStG, amended by the "Act on Further Tax Promotion of Electric Mobility and Amendment of Other Tax Regulations" of 12 December 2019).

Sometimes this can be more favourable than taxation at 15%. However, which form is more advantageous depends on the individual case. The travel allowance only applies if it exceeds the employee allowance of 1,200 Euro per year (provided there are no other business expenses). For rather short distances, it may therefore make sense to choose the flat rate taxation of 15%, as in these cases the reduction of the travel allowance does not or hardly matters.

Do I also get the travel allowance if I use a company car?

You can also claim the travel allowance if you use a company car for commuting. However, you must observe the following special features: For journeys between home and work, you must tax a surcharge on the private use value. This amounts to 0.03% of the list price per kilometre of distance for journeys to work and is added to the private use value of 1% of the list price per month.

In return, you may then, like any other employee, claim the travel allowance of 0.30 Euro per kilometre of distance (0.38 Euro from the 21st kilometre) as business expenses. However, if your employer taxes the taxable use value for the company car at a flat rate of 15%, you must deduct the monthly amount taxed at a flat rate from your business expenses and can only claim the remainder as business expenses.

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