Skip to content

German wage tax reduction: applying for an allowance

On the application of an employee subject to unlimited income tax liability, the tax office determines an ALLOWANCE to be deducted from wages overall (§ 39a(1) sentence 1 EStG). It takes effect on the running monthly wage tax deduction instead of coming back only through the annual return. Two figures frame it: the application is INADMISSIBLE where the expenses that count towards it do not together exceed 600 euros (§ 39a(2) sentence 4 EStG), and the window runs from 1 NOVEMBER OF THE PRECEDING YEAR to 30 NOVEMBER of the year in which the allowance applies (§ 39a(2) sentences 2 and 3 EStG). Once entered, the total holds for at most TWO CALENDAR YEARS (§ 39a(1) sentence 3 EStG).

Up to date for 2026 — verified on September 23, 2026Official procedure, no printed formGuide: about 30 min

Deadlines

Application window: from 1 November of the PRECEDING year to 30 November of the year the allowance applies to
§ 39a(2) sentences 2 and 3 EStG — you can apply well in advance, and still late in the current year
Validity: at most TWO calendar years
From the start of the calendar year for which the allowance first applies or is changed (§ 39a(1) sentence 3 EStG)
If circumstances change to your DISADVANTAGE: report them PROMPTLY
§ 39a(1) sentence 5 EStG — that is a duty, not an option
If circumstances change in your FAVOUR: a change may be applied for
§ 39a(1) sentence 4 EStG — within the two-year period

Documents to prepare

  • ELSTER access with a certificate or an ELSTER business account
  • Tax identification number and competent tax office
  • The year's work-related expenses: journeys to your first place of work, training, equipment
  • Details of a second household, where applicable
  • Special expenses under § 10(1) nos. 4, 5, 7 and 9, § 10(1a) and § 10b
  • Evidence for lump sums for people with disabilities or surviving dependants
  • The allowance determined for the previous year, where you are renewing
See the procedure on the official site

No form is attached to this procedure: the link leads to the official page that describes it.

What this page gives you

The guide above and the link to the official site. ActioFin does not produce any document for this page: whatever you fill in or file is done on the official medium.

Who this applies to

  • Any employee subject to unlimited income tax liability — the provision names their application expressly (§ 39a(1) sentence 1 EStG)
  • Anyone with high work-related expenses, to the extent they exceed the employee lump sum (§ 39a(1) sentence 1 no. 1 EStG) — typically a long commute or a second household
  • Anyone with special expenses within § 10(1) nos. 4, 5, 7 and 9, § 10(1a) and § 10b, to the extent they exceed the special expenses lump sum of 36 euros (§ 39a(1) sentence 1 no. 2 EStG)
  • People with disabilities and surviving dependants for whom the lump sums in § 33b(1) to (5) EStG come into consideration (§ 39a(1) sentence 1 no. 5 EStG)
  • Permanently separated spouses, for the pro rata single-parent relief from the month of separation (§ 39a(1) sentence 1 no. 9 EStG)
  • NOT worthwhile where the expenses do not together exceed 600 euros: the application is inadmissible to that extent (§ 39a(2) sentence 4 EStG)

Worked example

Sonja Merz commutes 48 kilometres to work each day in 2026

Sonja adds up her work-related expenses: journeys to her first place of work, training and work equipment. Only the part EXCEEDING the employee lump sum feeds into the allowance (§ 39a(1) sentence 1 no. 1 EStG) — what the distance produces and where the lump sum sits are worked out by the commuting allowance and employee lump sum calculators; this page states no per-kilometre rates. Before applying she checks the ADMISSIBILITY THRESHOLD: the application is inadmissible where the expenses listed in § 39a(2) sentence 4 EStG do not together exceed 600 euros. Her travel costs alone are above it, so the route is open. The window is wide: it opens on 1 November 2025 and closes on 30 November 2026 (§ 39a(2) sentences 2 and 3 EStG) — Sonja can therefore still apply in autumn 2026, with effect for the remaining wage tax deductions. Once the allowance is entered, the total holds for at most two calendar years from the start of the year for which it first applies (§ 39a(1) sentence 3 EStG); she does not have to reapply each year. If Sonja moves closer to work in 2027, circumstances change to her disadvantage — she is then OBLIGED to report that to the tax office promptly (§ 39a(1) sentence 5 EStG). If she moves further away, she may apply for a change (sentence 4). The duty and the option sit in two consecutive sentences, and they are not symmetrical.

How to fill it in, step by step

  1. Assemble your expenses and check the admissibility threshold FIRST: the application is inadmissible where the expenses named in § 39a(2) sentence 4 EStG do not together exceed 600 euros.
  2. For work-related expenses, deduct the employee lump sum — only the excess counts (§ 39a(1) sentence 1 no. 1 EStG).
  3. For special expenses within § 10(1) nos. 4, 5, 7 and 9, § 10(1a) and § 10b, deduct the special expenses lump sum of 36 euros (§ 39a(1) sentence 1 no. 2 EStG).
  4. Check whether lump sums for people with disabilities or surviving dependants come into consideration (§ 39a(1) sentence 1 no. 5 EStG) — on the wording of subsection 2 sentence 4 the admissibility threshold does not apply to them in the same way.
  5. Fix the window: from 1 November of the preceding year and until 30 November of the year the allowance is to apply to (§ 39a(2) sentences 2 and 3 EStG).
  6. Log in to Mein ELSTER and select the application for a wage tax reduction and wage tax deduction features.
  7. Note that § 39a(2) sentence 1 EStG requires the officially prescribed form and the employee's personal signature; ELSTER carries the same application in the portal.
  8. Check the simplification: the tax office may dispense with further details where you apply for no more than the allowance determined for the previous calendar year (§ 39a(2) sentence 5 no. 1 EStG).
  9. Diary the two-year horizon and report any worsening of your circumstances promptly (§ 39a(1) sentences 3 and 5 EStG).

Good to know

  • The allowance acts on the running wage tax deduction, not only on the annual assessment: it is the cash-flow side of what the tax return would otherwise return only the following year.
  • The two-year rule covers the total of the amounts determined under subsection 1 sentence 1 nos. 1 to 3 and 4a to 9 (§ 39a(1) sentence 3 EStG) — number 4 is expressly excepted from the annual rule in sentence 2.
  • The duty to report a WORSENING is worded more strictly than the right to apply on an improvement: 'is obliged to report this to the tax office promptly' (§ 39a(1) sentence 5 EStG) against 'may apply' (sentence 4).
  • The window opens ALREADY IN THE PRECEDING YEAR, on 1 November (§ 39a(2) sentence 2 EStG) — anyone planning in December can secure the allowance for the coming year already.
  • It closes on 30 November of the current year (§ 39a(2) sentence 3 EStG): an application in December comes too late for that year, and the adjustment then runs through the income tax return.
  • The 600 euro threshold is an ADMISSIBILITY threshold, not a reduction: once above it, everything counts, not merely the excess (§ 39a(2) sentence 4 EStG).
  • The tax office may dispense with further details where no more is applied for than the allowance determined for the previous calendar year (§ 39a(2) sentence 5 no. 1 EStG) — renewal is therefore easier than a first application.
  • The special expenses lump sum named in § 39a(1) sentence 1 no. 2 EStG is 36 euros and appears in the statutory text itself.

Common mistakes

  • Confusing the admissibility threshold with the allowance. The 600 euros decide whether the application is ADMISSIBLE (§ 39a(2) sentence 4 EStG); they are not deducted from the allowance.
  • Entering the whole of your work-related expenses. Only the part exceeding the employee lump sum feeds into the allowance (§ 39a(1) sentence 1 no. 1 EStG).
  • Applying in December. The period ends on 30 November of the year in which the allowance applies (§ 39a(2) sentence 3 EStG).
  • Reapplying every year. The total is taken into account for at most two calendar years (§ 39a(1) sentence 3 EStG).
  • Keeping quiet about a worsening of circumstances. The employee is obliged to report it to the tax office promptly (§ 39a(1) sentence 5 EStG).
  • Expecting the allowance to reduce the tax owed. It reduces the DEDUCTION during the year; what is finally owed is settled by the assessment.
  • Assuming an allowance dispenses with the income tax return. § 39a EStG says nothing about that.

Frequently asked questions

What does the allowance actually get me?

On application the tax office determines an allowance to be deducted from wages overall (§ 39a(1) sentence 1 EStG). It therefore reduces the running wage tax deduction instead of taking effect only through the annual assessment.

From what amount is it worth applying?

It is inadmissible where the expenses listed in § 39a(2) sentence 4 EStG do not together exceed 600 euros. Below that threshold an allowance from those items does not come into consideration.

By when must I apply?

The period begins on 1 November of the year preceding the one the allowance is to apply to, and ends on 30 November of the calendar year in which the allowance applies (§ 39a(2) sentences 2 and 3 EStG).

How long does an entered allowance last?

The total of the amounts determined under subsection 1 sentence 1 nos. 1 to 3 and 4a to 9 is taken into account for at most two calendar years from the start of the calendar year for which the allowance first applies or is changed (§ 39a(1) sentence 3 EStG).

What must I do if my situation changes?

If circumstances change in your favour, you may apply for a change to the allowance (§ 39a(1) sentence 4 EStG). If they change to your disadvantage, you are obliged to report this to the tax office promptly (sentence 5).

Do I have to document everything again for a renewal?

Not necessarily. The tax office may dispense with further details where you apply for no more than the allowance determined for the previous calendar year (§ 39a(2) sentence 5 no. 1 EStG).

Go further

Compute the related amounts

Understand this form: the related course

Related forms

Official sources

Read in German

Guide and document provided for information purposes only; they do not constitute personalised legal or tax advice. Check the recipient organisation's requirements and consult a professional if needed.