The first place of work, and why everything else depends on it

Two field staff drive the same route, 40 kilometres, 220 days a year. One claims 3,344 €, the other 6,688 €. The difference appears as a figure in neither employment contract: it turns solely on whether the employer assigned a first place of work or not.

One term that separates two sets of rules

German travel expense law knows two worlds. Journeys between home and the first place of work are settled by the commuting allowance. All other business journeys are travel costs and are claimed at actual cost or at flat kilometre rates.

The difference is substantial. The commuting allowance knows only the one-way distance, travel costs know the kilometres actually driven. The same route counts once in one case and twice in the other — that is the factor of two in the opening.

Everything therefore turns on whether a first place of work exists. It is not a place in the everyday sense but a legal term with a definition, and that definition starts not with frequency but with a decision by the employer.

The assignment is determined by the arrangements under employment or service law together with the agreements and instructions that fill them out. It is therefore a matter of drafting, made in the contract or in an instruction — and one that may be made or left undone.

The assignment is permanent in particular where the employee is to work at the establishment without a time limit, for the duration of the employment, or beyond a period of 48 months. A two-year posting therefore creates none.

Where such an arrangement is missing or unclear, a fallback applies. The first place of work is then the establishment at which the employee is permanently to work typically on every working day, or at which he is to spend two full working days a week or at least a third of his agreed working time.

Only here does frequency enter, and only in the alternative. Anyone who first counts how often someone is in the office is testing the second question before the first, and regularly reaches a different answer from the statute.

• per employment the employee has at most ONE first place of work
• where several establishments qualify, the employer determines which one it is
• where that determination is missing or unclear, the one nearest the home applies
• an educational institution attended for full-time study also counts as a first place of work

The last point surprises many students. Anyone taking up full-time study outside an employment relationship has a first place of work at the institution — and claims the journeys there under the commuting allowance, not as travel costs.

The second item on the list is the most interesting one for employers. Where several establishments qualify, the employer determines which is the first. That determination costs nothing and settles how every future journey is treated.

Where it is missing, proximity to the home decides — a criterion the business does not control and which can flip whenever an employee moves house. An express assignment in the employment contract is therefore almost always the quieter solution.

The commuting allowance: one rate, not two

For each working day on which the employee attends the first place of work, a commuting allowance is to be applied for each full kilometre of distance. Under the text in force the rate is 0.38 euros, and it applies to every full kilometre.

This point deserves attention, because many leaflets still read differently. A tiered arrangement with a lower rate for the first kilometres is no longer to be found in the statutory text in force; it knows a single rate for the whole distance.

What is counted are full kilometres of the one-way distance, not the round trip. Part kilometres fall away: at 24.8 kilometres, 24 are applied. And what is counted are working days on which the place is actually attended, not calendar days.

The shortest road connection governs. Another may be used where it is obviously more convenient for traffic and is regularly used by the employee. Both conditions must coincide — the detour must actually be driven, not merely be better.

The other side: journeys that are not commutes

Number 4a covers business journeys that are neither trips between home and the first place of work nor family home journeys. The commuting allowance precisely does not apply to them; actual expenditure does.

Instead of actual costs, travel costs may be claimed at the flat kilometre rates fixed for the vehicle used as the highest travel allowance under the Federal Travel Expenses Act. The rate therefore comes from another statute, not from income tax law.

Here the distance driven counts, outward and return. That is exactly where the difference in the opening comes from: the same kilometres, counted once in one case and twice in the other, and on top of that a different rate per kilometre.

For employees without a first place of work a counter-exception applies. Anyone who under his employment arrangements is permanently to attend the same location typically on every working day claims those journeys under the commuting allowance again.

The same holds for a large-area work zone, such as a port or forest district. The journey from home to the nearest access point follows the commuting allowance, while journeys within the zone are travel costs again.

The ceiling, and who never meets it

The allowance is capped: at most 4,500 euros per calendar year. That figure sits in the same sentence as the kilometre rate and is often overlooked, because it is reached only with longer routes or many working days.

The clause that follows lifts it again for the commonest case. An amount higher than 4,500 euros is to be applied so far as the employee uses his own car or one made available to him. Anyone driving a car effectively never meets the limit.

The cap therefore bites mainly on other means of transport: bicycle, motorcycle, car-sharing, on foot. Someone covering the route as a passenger hits the 4,500 euros on long journeys, while the driver of the same car does not.

The allowance does not apply to air travel or to routes covered by tax-free collective transport. Anyone riding the works bus claims nothing for that leg; the statute treats it as already settled.

Tax-free benefits in kind for journeys between home and the first place of work reduce the deductible amount. An employer-funded travel pass therefore cuts your own deduction — but not a benefit tax-free under section 3 number 37, which the statute expressly excepts.

Settled means settled, with two exceptions

Subsection 2 draws a line many underestimate. The commuting allowances settle all expenditure occasioned by the journeys between home and the first place of work and by family home journeys.

All means literally all. Parking fees, garage rent, repairs, even the cost of an accident on the way to work are absorbed by the allowance. They cannot be claimed alongside it, however high they may turn out in a particular case.

The first exception concerns public transport. Its costs may be claimed so far as they exceed the amount deductible as a commuting allowance in the calendar year as a whole. An expensive annual pass therefore beats the allowance where it is higher.

That calls for a comparison across the whole year, not per journey. The total ticket cost is set against the total of kilometres, rate and working days; the higher of the two amounts is claimed.

The second exception applies to people with disabilities. Anyone with a degree of disability of at least 70, or of less than 70 and at least 50 with significant impairment of mobility in road traffic, may claim actual expenditure.

These conditions must be evidenced by official documents. The option covers journeys to the first place of work and family home journeys alike, and it pays off precisely where the allowance does not cover the real costs.

Several homes, and which one counts

Where an employee has several homes, journeys from a home that is not the nearest to the first place of work are taken into account only where it forms the centre of his personal interests and is not attended merely occasionally.

Here too the two conditions apply together. The centre of personal interests alone does not suffice where the home is attended only occasionally, and frequent stays alone do not suffice without that centre.

Anyone regularly travelling from the more distant home without its being the centre of interests therefore computes with the distance of the nearer one. That is the commonest point of dispute for weekend commuters who claim no second household.

The centre of personal interests is settled by the actual circumstances: where the personal ties lie, where the family lives, where the clubs and friends are. Experience shows that a registration certificate alone does not carry that proof.

Anyone meeting the conditions of a second household is regularly better off with it, because accommodation and meals then count too. The second module therefore deals with it immediately after work away from base.

So anyone wanting to place his own case asks three questions in this order. Has the employer assigned a place of work? Is the assignment permanent? And is that place actually attended on the day in question?

Only the third question settles the individual day. Having a first place of work does not mean going there daily — and for every day on which it is not attended there is no commuting allowance either.

That is the bridge to the second module. A day without a journey to the first place of work is either a day working away from base or a day at home, and each is accounted for under rules of its own.

The lump sum is a threshold, not a bonus

Section 9a deducts lump sums for income-related expenses where no higher expenses are evidenced. From income from employment an employee lump sum of 1,230 euros is to be deducted.

The phrase where no higher expenses are evidenced makes it an either-or. The lump sum is not granted in addition but in place of itemised proof, and it applies even where no expenses arose at all.

From that follows a sober calculation before any receipt is collected. Only what goes beyond 1,230 euros has any effect at all. At 0.38 euros a kilometre and 220 working days, that threshold is crossed from roughly 15 kilometres of one-way distance.

For pension payments within the meaning of section 19(2) a separate and much lower lump sum of 102 euros applies. Anyone drawing an occupational pension therefore reaches the threshold with modest expenditure.

Note that all income-related expenses feed into this threshold, not only the journeys. Work equipment, professional association fees, training and the expenditure covered in the second module count too and may cross the line together.

For training, however, the statute draws a line of its own. Expenditure on vocational training or a course of study counts as income-related expenses only where a first qualification has already been completed or the training takes place within an employment relationship.

A first qualification means an ordered course of training with a minimum duration of twelve months full time and with a final examination. Where no final examination is provided for, the training counts as completed on its scheduled end.

For a first degree without prior training only the special expenses deduction remains, and it evaporates in a year without income. Anyone completing an apprenticeship first and studying afterwards is considerably better off for tax.

Finally, subsection 3 declares the rules on journeys, meals and the second household correspondingly applicable to further categories of income. They are therefore not purely employment law but apply, for instance, to letting and leasing as well.