Commuter Allowance, Mileage Allowance & Co.: Everything you need to know

Many employees travel countless kilometers daily for work. The costs of commuting can add up significantly. Fortunately, there are various ways for employees to deduct their travel expenses for tax purposes. However, when considering the commuter allowance, work-related expenses, and tax deductions for daily commutes to the workplace, some important points need to be taken into account. In this blog post, we explain the various terms and elucidate their differences and similarities.

Key Points

  • Through the commuter allowance, employees can claim the travel costs incurred for commuting to work as tax-deductible expenses with the tax office. The commuter allowance falls under work-related expenses in the tax return and reduces the taxable income for the year.
  • The distance allowance, better known as the commuter allowance, is independent of the mode of transport. Employees can deduct 0.30 euros per kilometer for each full kilometer from their taxes, and from the 21st kilometer, it increases to 0.38 euros.
  • The mileage allowance applies exclusively to business trips. Employees can get reimbursed 0.30 euros per kilometer for trips made with their private car. The mileage allowance is also referred to as the travel allowance, fuel allowance, or business travel allowance.
  • Since 2021, low-income earners whose commute is longer than 20 kilometers can benefit from the mobility premium.

What Are the Different Regulations for Commuters and How Can They Pay Off?

As a general rule: For the journey to the first place of work, i.e., the regular workplace, travel expenses are not reimbursed by the employer unless the company offers this as an employee benefit. Employees can, however, claim the costs incurred on the commute to work through the distance allowance as work-related expenses in their tax return. For business trips, the mileage allowance applies.

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Travel Allowance

The travel allowance is a collective term for all allowances available to employees. This includes both the commuter allowance (distance allowance) and the mileage allowance applicable to business trips.

For instance, self-employed individuals can use the travel allowance to deduct additional expenses for trips to the office, to clients, and for business trips for tax purposes.

For the commute between home and the first place of work, employees can apply the distance allowance. This applies to regular commutes to the office and can be used for each working day and the one-way distance.

For business trips or client visits, employees can use the mileage allowance to get reimbursed for incurred travel expenses.

The same amount of 0.30 euros per kilometer applies to all allowances. From the 21st kilometer, employees can claim even 0.38 euros per kilometer.

Commuter Allowance (Distance Allowance)

The distance allowance, also known as the commuter allowance, allows employees to claim travel expenses related to commuting to the workplace for tax purposes. The distance allowance enables employees to deduct 30 cents per kilometer for the one-way trip between home and the workplace for each working day. These travel expenses can be reported in the tax return to reduce work-related expenses and thereby lower the tax burden. It is important to note that the commuter allowance only applies to actual trips made between home and the workplace. The annual savings depend on the distance to the workplace and the number of working days.

  • 30 cents per kilometer can be deducted for the distance between home and the workplace.
  • Since 2022, 38 cents per kilometer can be deducted from the 21st kilometer onwards.
  • Up to 4,500 euros can be claimed annually.

It is essential to provide evidence of regular commutes to work and choose the shortest route.

The distance allowance or commuter allowance is independent of the mode of transport. It benefits pedestrians, cyclists, motorcyclists, bus, and train users, as well as car drivers equally. Flights, however, are excluded from the allowance.

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Flat-rate mileage allowance

Anyone who travels by car on business trips can make use of the mileage allowance. The mileage allowance offers employees the opportunity to be reimbursed for travel expenses incurred on business trips.

Employees can currently claim 30 cents per kilometer driven using the mileage allowance for journeys made in their own car. For journeys with other motorized vehicles, such as motorcycles, a flat rate of 20 cents per kilometer applies.

Mobility bonus

Low earners cannot benefit from the increased distance allowance or commuter allowance since 2021, as their income is below the basic tax-free allowance and they therefore do not pay income tax. They therefore do not have the opportunity to claim the increased commuting allowance for tax purposes. For this reason, the legislator has introduced the mobility bonus. The mobility bonus is a state subsidy program that was adopted as part of the climate package and is aimed at low-income earners with long commutes. They can also benefit from the increase in the commuter allowance.

Two conditions must be met in order to receive the mobility bonus:

  1. The commuter's journey to work is more than 20 kilometers.
  2. The commuter's income is below the basic tax-free allowance after deduction of social security contributions and the flat-rate allowance for income-related expenses, which means they do not pay income tax.

For every kilometer over 20 kilometers, low-income commuters receive 14 percent of the increased commuter allowance, which corresponds to 4.9 cents or 5.43 cents. Like the commuter allowance, the mobility bonus applies regardless of the means of transport used. The mobility bonus therefore also relieves the burden on pedestrians and cyclists who have no travel costs.

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Stefan Wendering
Stefan is a freelance author and editor at NAVIT. Previously, he worked for startups and in the mobility sphere. He is an expert in urban and sustainable mobility, employee benefits, and New Work. In addition to creating blog content, he also produces marketing materials, taglines, and website content, as well as case studies.
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