The daily commute to your workplace is not a private pleasure. The German state is aware of this and takes it into account by allowing you to deduct journeys between your home and workplace in your tax return. In this article, you will find out what is taken into account with this type of calculation and which so‑called travel expenses you can deduct from your taxes.
Distance allowance and income tax calculation
The German commuter allowance is 0.30 euros per kilometre and applies to journeys between your home and your first place of work. The maximum amount of the commuter allowance is 4,500 euros. However, it does not apply if you drive to work using your own car or a company car. Since 2021, an increased commuter allowance of 38 cents has applied from the 21st kilometre onwards. This regulation was adopted as part of the climate package and applies until the end of 2026. It is intended, among other things, to relieve commuters in rural areas who have no access to public transport.
The German distance allowance (Entfernungspauschale) is €0.30 per kilometre for the first 20 kilometres between your place of residence and your first place of work. From the 21st kilometre onwards, a higher rate of €0.38 applies. The allowance applies regardless of the means of transport used.
Distance allowance – what is taken into account?
The daily commute to your workplace is not a private pleasure. The German state is aware of this and takes it into account by allowing the costs of journeys between home and workplace as income‑related expenses (Werbungskosten) in the tax return, which reduces the tax base. In this article, you will find out what is taken into account with this type of calculation and which so‑called travel expenses you can deduct from your taxes.
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Distance allowance and income tax calculation
The German distance allowance for journeys to work (Entfernungspauschale) is 0.38 euros per kilometre starting from the first kilometre and applies to journeys between your home and your first place of work. The maximum amount of the allowance is 4,500 euros and applies to all means of transport with the exception of your own car (or a vehicle provided to you), for which this limit does not apply.
From 1 January 2026, a uniform rate of 0.38 euros per km will apply (without the 21‑km threshold), based on the 2025 Tax Amendment Act. This increase is unlimited in duration and is intended to relieve commuters in rural regions who have no access to public transport; the annual relief in 2026 amounts to around 1.1 billion euros.
Distance allowance – what is taken into account?
Take a look at what the tax office in Germany focuses on if you want to claim the distance allowance in your tax return for the current tax year.
Kilometre allowance from your employer – one‑way distance
The first point that the German tax office looks at for the distance allowance is the one‑way distance. The full commuter allowance is granted for each working day on which you actually travelled the route to work and back.
Distance allowance – number of journeys
You can only claim the distance allowance for the days on which you actually travelled to your first place of work. With a five‑day working week, this is about 220 journeys per year. In doing so, you must deduct vacation days, periods of illness and days on business trips that start at home. You cannot claim travel expenses for days spent working from home.
Distance allowance in the tax return – first place of work
The deduction of travel expenses is only possible for the first place of work. If you work at several locations, your employer must determine which of them is your first place of work. The tax office recognises the first place of work in accordance with your employment contract.
Tax refund through distance allowance – shortest road connection
When determining the distance between home and workplace, the shortest road connection is decisive. The tax office takes into account only full kilometres; however, you may indicate a route other than the shortest one if it is more convenient in terms of traffic and you use it regularly.
The distance allowance in Germany can significantly reduce your tax burden, especially for people who commute to work every day. From 2026 onwards, the rate will be 0.38 euros per kilometre, starting from the very first kilometre, but only the actual days on which you travelled to your first place of work count. It is therefore worthwhile to keep good records of the distance, the number of journeys and any allowances from your employer.
Calculating the distance allowance – multiple homes
If you travel to work from more than one home, journeys from the more distant home can only be used as the basis for the distance allowance if this home is the centre of your life and not just visited occasionally. Since 2014, one of the conditions for a home to be considered the centre of life is that you bear at least 10% of the ongoing costs (rent, food, etc.).
Tax refund for kilometres driven – double household
The costs of family trips home within the framework of maintaining a double household can also be taken into account through the distance allowance. Since 2021, there has also been an increased distance allowance for commuters with long journeys. If your employer has paid you tax‑free allowances for journeys home, these will be offset against the distance allowance to which you are entitled.
Tax refund through the distance allowance – what can be deducted?
Employees in Germany get to their workplace in many different ways. This is why questions and doubts often arise about what can be deducted as travel expenses for tax purposes. How does this work in practice? For the tax office, it does not matter which means of transport you use to get to work. In the case of a combined journey (for example by car and bus), the determining factors are the distance of the shortest road connection and the number of kilometres travelled. The distance allowance in Germany can also be claimed by every member of a carpool. In this case, you do not need to take detours to pick up passengers into account in your calculation. The maximum amount of the distance allowance of 4,500 euros also applies in the case of mutual ride‑sharing on working daysby people who do not use their own vehicle. You can also deduct job tickets and subsidies for public transport without taxes and social security contributions that the employer grants its employees. However, this benefit must be stated in the tax return so that the tax office can reduce the distance allowance accordingly.
Tax refund for the commute to work – what else can be deducted?
- Business trips to another branch of the company.
- Meals if you are away from home on a business trip for more than eight hours.
- Customer visits/training courses/trade fairs (provided you did not make any private detours and your employer did not reimburse you for the costs).
- Accident costs on the way to or from work (in addition to the commuter allowance, you can deduct the costs incurred as extraordinary expenses).
- Travel expenses for people with disabilities (if a degree of disability of at least 70 or 50 with the “G” mark in the ID card has been determined).
- Travel expenses when working in a home office that is recognized by the tax office.
- Travel expenses for self-employment.
German distance allowance – what cannot be deducted?
- Tax-free benefits in kind and lump-sum taxed reimbursements from the employer for journeys between home and the first place of work.
- Distance you cover with a company car to your family home if you are allowed to use the vehicle free of charge.
- Distance covered by airplane or tax-free public transport.
Additional relief for low-income earners – mobility premium
Low-income earners who do not pay income tax in the relevant year (e.g. with an annual gross salary below the basic tax allowance, approx. 11–12 thousand € in 2026) can apply for the mobility premium if the one-way distance to work is more than 20 km. This relief amounts to 14% of the distance allowance and is paid out directly after assessment of the tax return.
From 2026, the mobility premium is unlimited in duration – previously it was limited in time as part of the climate package. It applies regardless of the increase in the regular allowance to €0.38/km and is intended to support commuters from rural regions without access to public transport.
Example calculation:
For a distance of 40 km between place of residence and first place of work and 220 working days per year:
- Distance allowance:
40 km × €0.38 × 220 days = €3,344 - Mobility premium:
The mobility premium only relates to the part of the distance from the 21st kilometre, which in this example therefore covers 20 km:
20 km × €0.38 × 220 days = €1,672
How is the distance allowance calculated?
Calculating the distance allowance for commuting to work by public transport or private vehicle is not as complicated as it might seem at first. In any case, it is worth getting support from a tax advisor or an income tax assistance association – or you can do it yourself with a free program for German tax refunds. One of these is Taxando, which securely stores all your tax data related to the distance allowance and supports you in determining the final refund amounts for the current tax year.
FAQ
How high is the distance allowance in 2026?
From 2026, the distance allowance is 0.38 euros for each full kilometre of the one-way distance. The rate applies from the first kilometre and not only from the 21st kilometre as before.
In the tax return, is it the one-way trip or the round trip that counts?
In the German tax return, only the one-way distance is taken into account, i.e. from the place of residence to the first place of work. The kilometres are not doubled for the outward and return journey, as this is already reflected in the structure of the allowance.
How many working days can be claimed in the tax return?
In the tax return, only the days on which the employee actually commuted to the workplace may be stated. Vacation days, sick days, home office days, and business trips starting from home are not taken into account.
Is the distance allowance also available for journeys by bus or train?
Yes, the allowance applies regardless of the means of transport, so it can also be used for journeys by bus, train, bicycle or carpool. However, when using public transport, any subsidies from the employer must be taken into account, as they may reduce the deductible amount.
Does the €4,500 maximum amount apply when using your own car?
The maximum amount of €4,500 generally applies to people who commute without their own car, e.g. by public transport. For journeys with your own car or a vehicle provided by your employer, this limit usually does not apply.
Where do you enter the distance allowance in the German tax return?
The distance allowance is entered in the tax return as income-related expenses. In practice, this concerns the part related to commuting to work, usually in Annex N.
What is the mobility premium for commuters?
The mobility premium is additional support for people on low incomes who have a long commute and cannot fully benefit from the tax deduction. It can be particularly important for employees who commute more than 20 km per route to work.
Maciej Wawrzyniak
In his private life, Maciej enjoys sporting challenges, playing the guitar, and swimming in the lake. He is also the proud father of three sons.
