Claim tax on commuting to work
14. Feb 2023 | By Malena Gärtner
Commuting to work, whether by private car, by public transport or by company car, can be claimed by the employee as tax-reducing. We have summarised what employees have to pay attention to below!
The way to work is defined as the distance between home and the first place of work. The first place of work is, for example, the office, which is specified as the first place of work in the employment contract. The prerequisite for a first place of work is a permanent operational facility and the permanent assignment of the employee to it. Each employee can only be assigned to one first place of work. There is no first place of work for employees who work from home, as you don't have to commute to work.
Tax consideration for the way to work
The way between home and work can be deducted by the employee in the tax return with 0.30 euros per kilometer driven. When specifying the distance allowance in the tax return, it is irrelevant which means of transport is used to get to work. Whether by private car, company car, public transport or even on foot, the 0.30 euros can be claimed for tax purposes in all cases. It should be noted that the tax office only recognizes one trip per day as the way to work, i.e. only the one-way trip between home and the first place of work.
Commuting with company car and 1 percent method
If the employee has been given a company car for private use, the trip to work is taxed as a private trip. If the 1 percent method is used for taxing the non-cash benefit, a distance allowance of 0.03 percent is taken into account for the journey between the place of residence and the first place of work. If the company car is used to drive to work and otherwise only for business purposes and not privately, the employee must pay tax on this commute using the 1 percent method. For this purpose, the 0.03 percent of the gross list price is multiplied by the distance in kilometers between the place of residence and the place of work. However, the monetary benefit for the company car does not have to be taxed.
Commuting to work: document private trips in the logbook
If, on the other hand, the employee has opted for the driver´s logbook method, the journeys must be categorized accordingly as a way to work. In this case, there would be no taxation. The journey to work only has to be documented in the logbook with the date, the distance traveled and information on the mileage at the start and end of the journey. It is very important that the correct categorization is selected, since it was the way to work.
Even when keeping an electronic logbook, the route to work must be categorized as such. Most electronically managed logbooks are connected to the vehicle via GPS and remember the routes and their categorization. If an employee drives the same route every day with the company car, many software programs automatically recognize this route as the route to work and categorize it accordingly in the electronic logbook. If the categorization is wrong, the driver can change the assignment within 7 days and choose the route to work.
Special case: Mixed journeys
If the employee travels directly from his or her home to the first place of work with the company car, it is easy to categorize this route in the driver's logbook as a commute. It becomes more complicated if a detour is made on the way to the office, for example, to drop the children off at school. The detour that exceeds the regular distance to work is to be categorized as a Private trip.
It should be added in the remarks field of the logbook why the Detour has been made. When taxing the company car according to the 1 percent method it does not matter if the way to work contains a detour, since private trips are taxed at a flat rate anyway.
If the employee travels directly from his home to the customer without first visiting his first place of work, this trip is to be regarded as a business-related trip. If, on the other hand, the children are taken to school again before the customer visit, this detour is again to be classified as a private trip.
Double budgeting and family trips home
If an employee lives in a second home during the working week and travels to his main residence, e.g. to visit his family, on the weekend, these journeys can be claimed as family trips home. It is irrelevant whether this journey is made by car or by public transport. 0.30 euros per distance kilometer can be claimed for the journey by car as part of the income-related expenses. If the actual costs exceed the distance allowance when using public transport, these can also be claimed for the use of bus and rail.
For the employee, it can be worthwhile to claim the commute to work as part of the commuting allowance in the tax return. It is important that when keeping a logbook, the journey to work is categorized accordingly so that no problems with the tax office arise afterwards.