Employee Tax Allowance: Who Qualifies and What You Get
Learn how this automatic tax deduction works for employees in Germany and when you might need to claim more for your work expenses.
This scheme provides a standard deduction for work-related expenses to reduce the total amount of income you are taxed on.
Who it's for
This scheme is available to all employees who file an income tax return. It is designed to help workers account for the various costs incurred while performing their professional duties throughout the year.
What you get
You receive a deduction from your taxable income to cover work-related expenses. This amount is automatically set at 1,230 EUR. By reducing the amount of income that is subject to tax, the allowance effectively lowers your overall tax burden.
What it costs you
There is no fee or cost to receive this benefit. It is applied automatically to your tax assessment, meaning you do not need to go through a separate application process to receive the standard amount.
The catch to know
The 1,230 EUR is a fixed, standard amount provided to everyone. If your actual professional expenses—often referred to as Werbungskosten—are higher than this standard amount, you will not benefit from the higher amount unless you take extra steps. In those cases, you must itemize your specific professional costs in your tax return to ensure you are not missing out on a larger deduction.
How to apply
- Prepare your annual income tax return.
- Review your professional expenses to see if they exceed the standard 1,230 EUR.
- If your expenses are higher, list each specific cost item by item.
- Submit your completed tax return to the tax office.