Company cars are usually an expensive corporate benefit for companies. A mobility budget is a modern alternative for them and their employees. What options employers have to offer their employees a modern benefit and contribute to their travel costs.
Employers can provide their employees with a mobility budget in order to contribute to the costs of travel between home and work, but also to allow them private mobility. The mobility budget is a particularly flexible alternative to a company car, which is usually expensive to purchase and maintain.
Anyone who has taken a look at the draft of the Annual Tax Act 2024 will have come across the term mobility budget. The plan was for employers to be able to grant each employee a mobility budget allowance of up to €2,400 per year in addition to the salary already owed. Employers would have been able to pay a flat rate of 25 percent of the wage tax due on this extra salary. However, this employee-friendly regulation was unfortunately overturned by the Bundestag Finance Committee in October.
Nevertheless, employers can of course provide their employees with a mobility budget, for example for the use of public transport, even without this planned new regulation. As a rule, this assumption of the costs of public transport tickets is even tax-free in accordance with Section 3 No. 15 of the German Income Tax Act (EStG) - both for the journey to work and for private journeys. Employers only need to ensure that this benefit is granted in addition to the wages already owed.
This means: the previous gross salary must remain the same, it must be an additional benefit for employees. In addition, this regulation only applies to scheduled public transport or local transport, as different tax conditions apply to long-distance Deutsche Bahn tickets. These can only be subsidized tax-free for the journey to work.
It is up to employers to decide how to grant tickets to their employees. They can buy the tickets and give them to their employees or contribute to the ticket costs via the payroll.
The tax exemption under Section 3 No. 15 of the Income Tax Act also applies if employers give their employees the Deutschlandticket at the current price of €49 per month or reimburse the costs, as the Deutschlandticket only entitles them to travel on public transport.
However, from January 2025, the Deutschlandticket will be 9 euros more expensive and will then cost 58 euros. This will have an impact on employers who provide the Deutschlandticket as a job ticket, as the price of the job ticket will also increase. In addition, the new price for the Deutschlandticket will exceed the so-called 50-euro tax-free limit for non-cash benefits from January 2025. Employers who have previously offered the ticket to their employees as a non-cash benefit will have to think about how they can continue to do so tax-free.
However, employers now have two options as to how they can still offer their employees the Germany Job Ticket tax-free. Firstly, companies can continue to use Section 3 No. 15 EStG. In addition, companies have the option of continuing to grant the Germany Job Ticket as a non-cash benefit. If their allowance for the ticket does not exceed the 50 euro exemption limit. In this case, employees must bear the additional costs themselves. Technically, this option can be implemented using NAVIT's new split-pay function, for example.
If employers use the regulation in accordance with Section 3 No. 15 EStG to grant tax-free mobility budgets for public transport, this means that they must state the amount of the tax-free payments in the wage tax statement. As a result, the tax office will reduce the income-related expenses for the commuting allowance that the employee has applied for in their income tax return based on the entries in the wage tax statement.
If employers want to give their employees more freedom in choosing their means of transportation, they can also grant them the mobility budget as a monthly benefit in kind of up to 50 euros. This allows employees to use sharing services for cars, bicycles or e-scooters or even take a cab. Employers can rely on professional providers who specialize in implementing mobility budgets in companies. They offer technical solutions that allow employees to use payment cards to receive up to 50 euros in benefits in kind each month.
In order to create legal certainty in the event of future wage tax audits, employers should contact their tax advisor when introducing a mobility budget for the first time and check with him or her.
