Electric company cars are becoming increasingly popular – and not just for environmental reasons. For both employers and employees, fully electric company cars offer significant tax advantages compared to combustion engines, directly affecting payroll and the taxable benefit. At the same time, charging at home introduces new challenges for HR teams. How should electric company cars be taxed correctly? Which allowances for home charging are tax free? And what should companies keep in mind to stay compliant and efficient?
This article gives HR and fleet managers a comprehensive overview of the current company car taxation rules for electric and plug-in hybrid vehicles – including practical implementation tips.
Employers who provide employees with a fully electric company car benefit from significantly lower taxation of the non-cash benefit for private use compared to conventional vehicles.
Current rules:
Requirements:
For comparison: traditional company cars with combustion engines are taxed at 1%. The preferential rate for EVs currently runs until the end of 2030. Until the end of 2023, the price cap for the 0.25% rule was €60,000.
Example:
An electric car with a list price of €50,000 is also available for private use.
→ 0.25% of €50,000 = €125 per month as taxable benefit.
One often overlooked risk in electric company car taxation is the €70,000 price limit that determines whether the 0.25% or 0.5% rule applies. Due to long delivery times, manufacturers may adjust prices between order and delivery.
The issue: Taxation is based on the official gross list price at first registration — not the contract price or any discounted rate. If a price increase pushes the car over €70,000, the taxable benefit automatically rises from 0.25% to 0.5%, resulting in significantly higher tax costs for the employee.
HR tip: Inform employees early about this risk and document price details transparently to avoid misunderstandings or disputes later.
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Plug-in hybrids (PHEV) can still qualify for reduced taxation – but under stricter conditions.
Since 2025, the 0.5% rule applies only if:
If a plug-in hybrid does not meet these criteria, the standard 1% taxation applies – a clear disadvantage. Vehicles purchased before 2025 remain under the 2024 rules.
While fuel expenses for combustion engines are usually handled via fuel cards or receipt reimbursement, charging an electric company car at home is more complex. Since employees can charge both at public stations and at home, the electricity used must be clearly attributable to the company car if the employer reimburses it.
Employer-provided wallbox
Employee-owned wallbox
1. Wallbox with separate meter registered with the energy supplier
Allows precise tracking of charged kWh. Must be used exclusively for the company car – private vehicles require a separate wallbox and meter.
2. Calibrated intermediate meter
Measures consumption for the company car accurately, as long as only that vehicle charges through it.
3. Smart wallbox with user identification
RFID access or user profiles can assign charging sessions to specific vehicles or users. Ideal for households with multiple EVs and suitable for digital reimbursement platforms.
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Get infoThe simplest solution for employers and employees is a monthly flat-rate reimbursement for home charging costs. This approach is particularly attractive since tax authorities exempt such flat rates up to a defined limit. The benefit: no need for detailed proof of consumption, and payroll remains simple, compliant, and audit-proof.
According to § 3 No. 50 EStG, there are two flat-rate options:
Alternative: Employers can also reimburse the exact electricity costs for charging the company car. This can be done via a calibrated wallbox or a digital system with automatic documentation. Full-service providers like DKV Mobility or Aral Fuel & Charge offer integrated solutions.
Electric company cars allow companies to visibly advance their sustainability goals while providing tangible tax benefits for both employers and employees. The combination of the 0.25% rule, tax-free charging allowances, and incentive programs makes electric vehicles a strong differentiator in the competition for talent.
At the same time, HR professionals who understand the details – tax limits, home charging reimbursements, and payroll implications – can avoid pitfalls and reduce administrative workload, especially through standardized allowances, clear car policies, and digital tools.
Now is the right time to think of e-mobility not just as a fleet topic, but as a strategic HR benefit.
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