Mileage Allowance Definition and Meaning
The term “mileage allowance” is the official term for the well-known commuter allowance. In part, the slang expression arose from the attempt to deduct travel costs from the 20th kilometer onwards. In this case, commuters would actually have an advantage over employees who have a shorter commute. But since this would contradict the principle of equality between taxpayers, the mileage allowance is not only valid for commuters, but for all employees, regardless of the distance between home and work.
30 cents from the first kilometer
From the first kilometer onwards, the employee has the right to deduct 30 cents per kilometer from tax for every working day on which he has covered the distance to work. This means that this amount is deducted from the annual income before the tax burden is calculated.
All travel costs, such as gasoline or new tires, are covered in the amounts that are settled with the kilometer flat rate. But how high are the actual costs incurred for commuting is not asked. This means that the employee can also travel to work on foot or by bike, which gives them a clear advantage over drivers. The full mileage allowance can be claimed even if the journey to work is very costly. But if you don’t drive to work in your own car, you can only claim a lump sum up to a value of 4500 euros and that corresponds to a commute of around 70 kilometers over 220 working days, which would be a decent achievement with a bike.
Use of public transport
Employees who travel to work by public transport can choose between the mileage allowance or an exact billing of the travel costs. So if the ticket for the train costs more than 30 cents per kilometer, then the entire fare can be deducted from tax. However, there is no mileage allowance for commuting to and from work by plane, only the exact price for the flight ticket can be deducted from the tax. The same applies to groupage transport organized by the employer. If no payment is required for this, then it is not possible to deduct travel costs from the tax.
The mileage allowance for disabled people
The kilometer flat rate does not cover the additional costs for commuting for people with disabilities with a degree of disability of at least 70 or a degree of 50 in the disability card. If additional costs arise for a disabled person, such as tolls or more expensive but handicapped-accessible vehicles, then these additional costs can be deducted from tax. But as with any other employee, only the shortest distance between the apartment, which is the center of life, to the place of work applies.
Employees who have to travel several times in one working day also have disadvantages. Because only one way to work needs to be specified per calendar day. The workers who have to commute more often are disadvantaged because the multiple journeys are not taken into account.
The individual kilometer flat rates at a glance:
- With the car currently 30 cents
- Motorcycles and scooters 13 cents
The mileage allowance must, however, be differentiated from the distance allowance for employees. This can be claimed as income-related expenses in the income tax return, but only as a simple distance between home and work.
At the beginning of the year, the head of the customer department visits the most important customers personally using his private car. After completing the business trip , he creates his travel expense report . In addition to the accommodation costs and additional meals, this also includes the kilometers driven.
Journey to the hotel: 485 km.
Journey from the hotel to the customer: 12 km.
Return: 485 km
That results in 982 kilometers driven.
allowance: 30 cents . Refund claim: 294.60 euros
Without proving the actual costs, the employer can pay an amount of 294.60 euros tax-free to the head of the customer department as part of the travel expense report. So there is no wage tax and no social security contributions are due here. You can find templates for a travel expense report on the Internet .
What about the mileage allowance for self-employed and freelancers?
Flat-rate mileage billing is also important for self-employed and freelancers. Because especially for small companies and start-ups it is not a matter of course that they buy a company car right away. You therefore use your private car for business trips and have the costs reimbursed. This calculation can also be based on the mileage allowance, but the actual costs can also be determined.