You can save a lot of money on your taxes by making use of the so-called Steuerpauschale(tax flat-rates). To manage expectations, this is not a way to cheat on taxes. In Germany, this will come at a very high cost to you.
The Finanzamt allows everyone depending on your type of employment to declare a lump sum for some expenses with no questions asked. This saves time for you as a taxpayer but more importantly for the tax office in processing tax declarations.
This is how it works. Let’s say the Finanzamt says every year, you can buy stationery to the tune of 100Euros and get a refund on that – no questions asked. Usually, you will have to gather all your receipts throughout the year and submit them with your tax declaration.
In this case, you can just have to specify the lump sum of 100 Euros when declaring your taxes(sometimes regardless of how much you spent on stationery). If you spent less, your incentive is higher to use the lump sum. If you spent a lot more than that, then you will probably want to submit everything. Use this article as a guide. We will do our best to update these numbers as often as possible since the lawmakers can change them anytime. Consult your tax advisor or use a good tax software for up to date information. I will reference a few at the end.
Now what are the things you can use declare as lump sums?
Here are a few terms:
As an employee, the Finanzamt automatically accounts for 1000 Euros in costs related to work. This means you are paying in effect 1000 Euros less in taxes than you should. However, if you incur costs, above 1000 Euros then you can get a refund on the difference. It is advisable to keep your receipts even if you anticipate you are going to be within the 1000 Euro range.
In light of the fact that most people have had to work from home during the Corona crisis, there is the new Home Office Pauschal. For most people, because they stayed at home, there will be almost no tax refunds for the kilometres covered(the transportation flat rate below).
Prior to 2020, you could only get money back from the Finanzamt for working at home if you had a separate room only for working. Then you could offset that percentage from your rent.
The tax flat-rate for Home office is 5 Euros per working day. And capped at 600 Euros.
If you still had to go to work or had a mix of home office and going to work, consider calculating which variation gets you the best refund.
Transportation Flat Rate(Pendlerpauschal)
For every kilometre you cover going to work, you get a 0.30 cents. I said “cover” because, this is regardless of whether you drive, cycle, walk or take public transport. After the 21st kilometre, the rate goes up to 0.35 Euros per kilometre.
There is a cap of 4500 Euros per year with the exception of employees who drive with their own cars. If you take public transport, you can use the cap or will have to provide receipts if you spend more than that.
The flat rate here is 110 Euros. You can enter this in your declaration even if you did not buy any equipment for work – no questions asked. As always, if you incurred higher costs, then it is better to use your receipts.
Bank Charges (Kontoführung)
Does your bank charge you a fee, you can enter a flat rate of 16 Euros. If you are using a free bank, you are not entitled to this.
Meal Expenses (Verpflegungsmehraufwendungen)
You can use this flat rate if you travel for work to cover your meal expenses.
|More than 8 Hours||14 Eur|
|More than 24 Hours||28 Eur|
|Bonus on arrival and departure day(regardless of length of trip||14|
Job Applications (Bewerbungskosten)
For every online application, you receive 2.50 Euros. For print applications, you receive 8.50.
If the costs for your application is more than that, you can also declare them.
Laundry Flat rate (Reinigungskosten)
If you work in an industry where you have to wear a uniform or a specific type of clothes, you can declare these rates when for washing them.
Per wash – 0.88Euro/ kg
Per dry – 0.55Euro/kg
Ironing – 0.07Euro/kg
Relocation Flat rate (Umzugskosten)
If you have had to move because of work or if moving to a new apartment will significantly reduce how long you need to get to work, then you can also use this Steuerpauschal.
For singles: 820 Euros
Couples: 1639 Euros
For every child/dependent: 361 Euros extra
Phone Bills (Telefonkosten)
For your phone and internet bill, you can declare 20% of the cost, capped at 20 Euros per month. This only applies if you also use your phone for work.
Other Tax Exemptions
Relief for Single Parents (Entlastung für Alleinerziehende)
Single parents are giving a tax break of 4008 Euros. For every additional child there is an extra 240 Euros.
Care Takers (Pflegepauschbetrag)
If you take care of a relative in their home without pay, you are entitled to declare a flat-rate of 924 Euros in your tax returns. However it depends on the degree of care the relative needs.
Lump-sum of the disabled (Behindertenpauschbetrag)
Depending on the degree of disability a person, you reduce your taxable income up to 3700 Euros. This will double in the year 2021 to up to 7400.
These are some of the tax breaks you can enjoy in Germany. Always consult your tax advisor. You can also use tax software(some of which are available in English) Most of them will give you tips on the latest flat-rate possibilities that apply to you. You can read my review of Wundertax here.