What can I deduct for employer benefits for commuting to work?

1. Basic principles of the tax treatment of employer subsidies

Many employers contribute to the costs of commuting to work. The tax implications depend on how this support is structured.

Employer subsidies for travel between home and the primary workplace are generally considered taxable income. However, the legislator allows special tax simplifications: The employer can tax such subsidies at a flat rate of 15 percent income tax (§ 40 para. 2 sentence 2 EStG). In this case, the subsidies are exempt from social security contributions.

For the employee, this means: The subsidy does not increase the taxable gross salary and does not need to be declared as income in the tax return.

If the employee receives tax-free or flat-rate taxed employer benefits, the travel allowance is reduced by the employer's reimbursements (§ 9 para. 1 sentence 3 no. 4 sentence 5 EStG).

2. Tax-free employer benefits

Since 2019, certain employer benefits for commuting can be completely tax and social security-free. The condition is that they are paid in addition to the salary already owed, i.e. not through a salary conversion.

The tax exemption applies to:

• Travel between home and primary workplace,
• Travel to a meeting point specified by the employer,
• Travel in a large-scale work area (§ 9 para. 1 no. 4a sentence 3 EStG).

Examples: If the employer pays 30 Euro per month for a public transport monthly ticket in addition to the salary, this amount remains tax-free. A job ticket for travel to a port area is also tax-free if the use is documented accordingly.

3. Which means of transport are subsidised?

The tax exemption does not apply to all means of transport, but only to certain ones.

Subsidised are in particular:

• Public transport in regular service: ICE, IC, EC, regional trains, long-distance buses, underground, trams, buses
• Also private journeys on public transport are subsidised if covered by flat-rate tickets

The Deutschlandticket is tax-free if the employer's subsidy is in addition to the salary.

Not subsidised:

• Taxis (except in licensed regular service)
• Chartered buses for individual journeys
• Air travel

Note: A taxi is not considered a subsidised public transport (BFH, judgement of 09.06.2022 – VI R 26/20).

4. Job ticket & benefits in kind

The monetary value of a job ticket is not counted towards the 50 Euro exemption limit for benefits in kind (§ 8 para. 2 sentence 11 EStG). This exemption limit can therefore be used additionally.

Subsidised are, among others:

• Free or discounted tickets (e.g. monthly tickets, BahnCard 100)
• Subsidies for tickets purchased by the employee
• Free rides for certain occasions (e.g. smog alert)

5. Travel allowances for journeys with your own car

Employer subsidies for journeys with your own car are not tax-free. However, they can be taxed at a flat rate of 15 percent (§ 40 para. 2 sentence 2 EStG).

This applies:

• Taxable, but can be taxed at a flat rate of 15% (§ 40 para. 2 sentence 2 EStG)
• Exempt from social security contributions if taxed at a flat rate
• Reduction of the travel allowance is required

Example: If the employer pays 100 Euro per month as a car allowance and taxes it at a flat rate, the amount remains tax-free for the employee. However, the travel allowance is reduced accordingly in the tax return.

6. Travel allowance despite employer benefits

The travel allowance can still be claimed:

• 0.30 Euro per kilometre for the first 20 kilometres
• 0.38 Euro from the 21st kilometre

If the employee receives tax-free or flat-rate taxed subsidies, this allowance is reduced.

Important: The travel allowance only has an effect if the total work-related expenses exceed the employee allowance of 1.230 Euro (2025).

7. Company car and travel allowance

The travel allowance can also be claimed when using a company car, provided the monetary value for travel between home and the primary workplace is taxed (e.g. according to the 0.03 percent rule).

If the employer taxes this additional value at a flat rate of 15 percent, the travel allowance can still be claimed as work-related expenses. However, other tax-free or flat-rate taxed employer benefits reduce the travel allowance if they relate to the same journeys.

8. Price advantages from third parties

If employees receive discounts from a third party, these are tax-free if:

• the third-party company has a self-economic interest,
• the discounts are also granted to other third parties,
• or the granting of the discount is predominantly in the interest of the employer.

Such benefits are taxable, however, if the employer actively participates in granting them or if the benefit is clearly related to the employment relationship.

Conclusion: Which option is advantageous?

Whether an employer subsidy is tax-efficient depends primarily on the distance to the workplace and the type of employer benefit.

Both tax-free and flat-rate taxed subsidies of 15 percent lead to a reduction of the travel allowance. An individual comparison calculation is therefore recommended.