All professional expenses are part of income-related costs and can be deducted from tax.
What are work-related costs?
Employee expenses includes all costs that employees incur during their employment. These include daily commuting to work, errands, training, cost of work clothes and occupational insurance.
What is the allowance?
The tax office takes into account an employee lump sum of 1,000 Euros per year as income-related expenses. No proof is required for this amount and it will be automatically deducted from taxable income.
Many employees have in excess of 1,000 Euros work-related expenses annually. If you want to claim the full amount against income tax, you can easily do so by filing a tax return. In this case, the tax office can demand proof in the form of invoices or other documents. Many expenses, also lump sums, can be claimed here.
Typical costs incurred by workers
Travelling from home to work can be deducted in full or on a flat rate of € 0.30 per one-kilometer trip.
Acquisitions for professional purposes are fully deductible. These include briefcases, laptops, phones and writing utensils.
Contributions to insurance that cover occupational risk, such as professional and accident insurance, are expenses.
Occupationally arranged relocation can be deducted completely from income tax, although there is a relocation fee.
Travelling to work
For the distance between home and work, the allowance of 0.30 euros per kilometer single trip can be deducted from tax due. The flat rate is valid independent of the type of transport and includes carpool passengers. A maximum of 4,500 euros per year can be deducted as a distance allowance.
As an alternative to the distance allowance, employees can also deduct travel expenses in full. For this, the tax office demands proof in the form of receipts or tickets for public transport.
Business travel & training
Trips in the course of professional outreach activities or further training measures can be deducted from income tax. The business travel lump sum can be for the return trip, with an allowance of 0.30 euros per kilometer claimable.
Note: If the employer has already been reimbursed certain costs of a business trip or training, this must be stated in the tax return.
Flat rate for additional meals
For longer absences from the workplace, employees are entitled to compensation for additional meals. If the employer does not pay any expenses or similar, or if the absence is more than 8 hours, the food allowance is 12 Euros. With an absence of 24 hours there is a lump sum of 24 euros. For business trips abroad, this sum can be much higher.
Predominantly work items are recognised, in full, as a business expense. If a single piece of equipment does not exceed 952 Euros, (including 19% VAT), this can immediately be fully deducted. For more expensive purchases, the purchase price can be amortized over several years.
Again, only costs that have not been reimbursed by the employer can be deducted. In principle, any object can be a working tool. Typical examples are:
- PC, notebook, smartphone
The expenses for professionally arranged removals are fully tax deductible. In addition to travel costs, other expenses, such as costs for a removal company, brokerage fees or possibly double rental payments, can be deducted. In addition, there is a flat rate for further removal costs of 764 Euro, (from 01.02.2017), which is paid without proof.
If you have a second household for work reasons, you can deduct many of the costs for this from the income tax, including:
- Rental and additional costs
- Second home tax
- TV licence
- Furniture/ furnishings
- Travel between first and second home
- Requirements for a double budget
- The second home is furnished for professional reasons
- To reach the workplace from the second home takes at least 30 minutes
- There is a financial contribution at the primary residence
- The primary residence is the family home
Contributions to professional associations, trade unions & donations
Contributions to professional associations, trade unions or donations to relief organizations can be deducted in full from income tax.
All insurances that cover occupational risk can be claimed as income-related expenses. These include professional liability, accident insurance, (for professionally induced accidents), and legal expenses insurance, (employment law).
Insurance companies that cover private risk, (health and long-term care insurance, life insurance, liability, legal expenses, etc), are not included in income related expenses, but can be deducted as special costs.
Telephone and Internet
If a private telephone or Internet access is also used for business purposes, the costs can be applied pro rata. Without individual proof, a flat rate of 20 percent with a maximum of 20 euros monthly is recognised.