Tax Deductible Expenses For Employees In Germany [2024 English Guide]

Key takeaways

• The German tax office made an average of 1095 € in tax refunds.
• You can deduct at least 1516 € from taxes without proof.
• The German tax authorities automatically consider the employee flat rate of 1230 € (as of 2023) when calculating the tax returns.
• You can deduct all the expenses you incur to earn an income from your tax return.

This is how you do it

• Don’t hesitate to file an income tax return voluntarily.
• Use the tax software to file your income tax return in English and with ease. The tax programs we recommend are SteuerGo*, Wundertax*, and Smartsteuer*.
• Save all the invoices and receipts. Small bills can add up to big sums by the end of the year.

Table of Contents

In 2019, the German tax office made an average of 1095 € in tax refunds. Around 12.7 out of 14.4 million taxpayers received a tax refund. [1]

However, you can only get a tax refund if you file an income tax return. So, you miss out on hundreds to thousands of euros by not filing the tax return.

In this guide, we’ll show you how to save taxes as an employee in Germany.

What can employees deduct from taxes in Germany?

Employees can deduct all the money they spend to earn their income. This includes everything from an application photo to the trip to the interview.

After getting the job, or if you already have a job, you can deduct all work-related expenses (Werbungskosten), such as further training, business trips, etc. However, you can deduct the expenses only if your employer hasn’t reimbursed them.

The German tax office also offers an employee flat rate of 1,230 euros from 2023. It was 1,200 € in 2022 and 1000 € until 2021. 

You don’t have to provide proof to claim the “employee flat rate.” Moreover, the tax office automatically deducts it while calculating your taxes.

So, you must enter the individual expenses only if they are more than the “employee flat rate.” You enter these expenses in Annex N of your tax return. 

Employee expenses tax office accepts without proof

Almost every employee in Germany can deduct at least 1516 € every year without proof from their income tax return. If you kept the invoices and planned your year smart, you claim even more in taxes.

Here are some of the work-related costs (Werbungskosten) you can deduct without proof from your income tax return.

• Bank account fees: The German tax authorities accept 16 euros per year as bank account fees without proof. So, you claim it even if you have a free bank account.
• Home office lump sum: You can claim up to 1260 € without proof if you worked from home.
• Travel from home to the office: You can claim up to 4500 € without proof.
• Internet and phone costs: Claim up to 240 €.
• Relocation flat rate: Claim up to 964 € plus 643 € for each additional person from 1 March 2024 if you relocate for professional reasons.

Common income-related expenses (Werbungskosten) employees can deduct to save taxes in Germany

Travel expenses from home to the office

You can deduct travel expenses for journeys between your home and your first place of work.

The travel flat rate is 30 cents per km for the first 20 kilometers. It increases to 38 cents per km from the 21st kilometer. 

The travel allowance is independent of how you get to work. So, you can claim the same flat rate if you travel via bicycle or car. 

The travel allowance is generally limited to 4,500 € per year. However, if you incur higher travel costs, you can claim them in your tax return instead of a flat rate.

Deduct home office costs from taxes

From 2023, you can claim the home office allowance even if you don’t have a dedicated home office space. The tax office also increased the home office flat rate to 6 € per day.

Additionally, you can now claim the home office allowance for a maximum of 210 days, bringing the home office lump sum to 1260 € (210 * 6€).

You can even deduct unlimited home office costs from the taxes if you meet the following criteria.

1. Your home office is the center of your professional activity
2. Your home office space meets the strict requirements set by the tax office. 

Telephone and internet costs

In addition to the “home office flat rate,” you can deduct the telephone and internet costs.

If you don’t use your landline or smartphone exclusively for work, you can split the costs between professional and private use. The tax office usually accepts 20% of the invoice amount but a maximum of 20 € per month. 

So, you can claim up to 240 € per year (12 * 20€) in your tax return. However, it’s up to the tax office to accept it.

Cost of work equipment like PC, desk, chair, etc.

The tax office considers everything you use at least 10% of the time for professional purposes as work equipment. And you can deduct it from your taxes as income-related expenses (Werbungskosten). 

Work equipment could include a briefcase, laptop, desk, office chair, and bookcase. Moreover, you can claim home-office furnishings even if you don’t have a dedicated workspace that fits the tax office’s criteria. 

Things to keep in mind while claiming work equipment costs.

• You can claim part of the work equipment costs if you use it for both professional and personal activities. The part depends on the percentage of professional usage.
• Example: If you fill 75% of the bookshelf with work-related books or material, you can deduct 75% of the bookshelf cost from your tax return. 
• You can deduct 50% of the computer costs without proof.
• You can deduct complete costs if you use the work equipment for professional purposes at least 90% of the time.
• From 2018, work equipment under 800 € net or 952 € after 19% VAT can be deducted in full from taxes. 
• Equipment that costs more than 800 € net must be depreciated over its useful life. You must write off the costs on a monthly basis in the year of purchase and later on a yearly basis. The useful life varies depending on the work equipment in question. For example, the useful life of your office desk is 13 years, and your computer’s is only three years.
• From 2021, you can deduct the full cost of computers and peripherals (keyboard, mouse, etc.).

Insurance costs

You can deduct the costs of work-related insurance from your taxes. This includes work-related accident insurance, liability insurance, legal insurance, etc. 

You can also deduct legal costs from your taxes if they are work-related. For example, you need legal advice on your work contract, severance package, etc.

The cost of legal disputes before the tax court is also tax deductible. 

Cost of applying or looking for jobs

You can deduct the cost of applying for a job from your tax return. It doesn’t matter if the application was successful. 

The job application costs include

• a subscription to a job portal, 
• telephone costs,
• postage,
• costs for photocopies of certificates,
• unreimbursed travel expenses for interviews, etc. 

Deduct income-related expenses you incur when starting a new job

Deduct relocation or moving costs from your tax return

If you move for professional reasons, you can deduct your relocation costs in full. For example, you got a new job or moved to reduce your working time by at least one hour per day.

If you don’t have invoices, you can claim the relocation lump sum. The relocation flat rate is 964 € plus 643 € for each additional person from 1 March 2024.

You can learn more about relocation costs in our guide on deducting moving costs from tax returns.

Deduct double rent payments (Doppelte Miete) to maximize tax savings

When you move from one location to another, there is usually an overlap between leaving your old place and moving into the new one. 

During this overlap, you pay rent for both places. This is called double rent (Doppelte Miete).

The tax authorities consider the double payment of rent to be tax-deductible as long as the move was due to professional reasons.

Here is how it works.

• Until you move to the new place, you can deduct the rent you are paying for the new place.
• Once you move into the new place, you can deduct the rent you pay for the old place.

NOTE: You can deduct the double rent only for a certain period, called the “moving phase (Umzugsphase).” You cannot deduct the double rent paid after the moving phase ends.

The moving phase begins when you give the termination notice of the old place and ends once the regular notice period finishes. 

For example, suppose you have a three-month notice period to terminate the rental contract. You gave the notice on 1 February 2024. Then, the double rent period starts on 1 February 2024 and ends on 30 April 2024. 

You can only deduct the double rent paid during this period.

The cost of buying and cleaning work clothes is tax-deductible

You can deduct the cost of buying and cleaning the work clothes from your income tax return. Some examples of work clothes are:

• uniforms,
• safety shoes,
• doctor’s coats,
• surgical trousers,
• a judge’s robe and beret, etc.

You cannot deduct conventional “civilian” clothing from taxes, even if you use them exclusively for professional purposes. For example, you cannot deduct the cost of a formal suit you wear only in the office.

Cost of driving license required for the job

Truck or bus driver’s license costs are generally work-related expenses (Werbungskosten) if you need them for work. On the other hand, car driver’s license costs aren’t. It doesn’t matter if you use the car only to go to work. 

Tax deductible expenses for employees while working

Deduct costs of maintaining double household from income tax return

Suppose you have to maintain a second household near your place of work. You can deduct the rent, travel costs, moving costs, etc., from your taxes.

You can claim up to 1,000 € per month in rent and utilities for your second home. Additionally, you can deduct the cost of travel to your primary residence, furniture, etc.

Claim costs of business trips in your tax return in Germany

You can deduct the cost of travel for professional reasons from your income tax return, assuming your employer didn’t reimburse them. For example, a trip to attend a seminar, trade fair, etc.

The business trip expenses include

• travel costs,
• accommodation costs,
• seminar or fair entry fees, and
• meal expenses.

Deduct costs incurred during an accident from your taxes

You can deduct the damage costs incurred during an accident on a business trip or journey between your home and first place of work. 

The damage costs the tax office considers for tax purposes are

• the costs of repairing your and others’ vehicle
• the costs of repairing the rental car.

The tax office considers the Bahncard costs for tax purposes

You travel frequently via trains for professional reasons. So, you bought the Bhancard to reduce the travel costs.

In this case, you can claim the costs of Bhancard when filing a tax return. You can deduct the business portion if you use the Bhancard for both private and business purposes. 

Claim back professional associations’ membership fees

You can also deduct professional association membership costs as income-related expenses (Werbungskosten). This includes medical or bar associations, trade unions, etc.

Deduct tax advisor or tax software costs

You can deduct the job-related portion of the tax advisor or software costs from your income tax return. 

The tax software programs automatically add the app’s costs when filing your tax return.

Cost of credit card used for professional purposes

You probably also use your credit card for business expenses. If so, calculate the percentage of business use. You can deduct this percentage of credit card costs as income related expenses (Werbungskosten).

Bank account fees

German banks usually charge a bank account maintenance fee. You can claim 16 € per year as a bank account fee without proof.

Claim the cost of the party you threw in your office

The costs of a party with colleagues are tax deductible if the party was for professional reasons. However, you must comply with the following conditions to claim the party costs:

• You act as host and determine the guest list.
• You didn’t invite the people individually but based on an abstract criterion. For example, the entire department, all field staff, all the trainees, etc.
• The celebration should take place on company premises.
• The party should be during or outside of regular working hours, for example, on a Friday afternoon.
• The party costs should be within reasonable limits. A glass of champagne and wine with snacks is fine.
• Suppose you also invite personal friends and relatives. In this case, you can deduct part of the party costs as income-related expenses (Werbungskosten).

What educational costs can employees deduct from taxes?

• Cost of getting a doctoral degree for the job
• Cost of work-specific literature, such as magazines, books, etc. Try that your bill contains the book’s title to avoid unnecessary questions from the tax office.
• Costs of subscriptions you use for professional purposes, such as LinkedInLearning, Udemy, etc.
• When filing a tax return, you can claim the costs of training and further education if they help you in your job or career growth.
• Cost of language course 

NOTE: You can claim all the education and training costs as income-related expenses only if you need them for professional reasons.

Is filing an income tax return in Germany complicated?

Many people don’t file an income tax return as it seems complex. But it doesn’t have to be the case.

There are many tax programs in Germany that offer English interfaces. These programs translate the German tax jargon into easy-to-understand questions.

So, filing a tax return in Germany is as simple as filling out a form online. The tax programs we recommend are SteuerGo*, Wundertax*, and Smartsteuer*.