Since May 1, 2023, the Deutschlandticket - also known as the D-Ticket or 49-Euro-Ticket - has been available as a monthly subscription. With the Deutschlandticket, commuters can use all means of public transport throughout Germany for a fixed monthly price. What do employers have to consider for tax purposes if they pay part of the costs for the Deutschlandticket or even cover the entire ticket?
If employers pay a subsidy for the Deutschlandticket purchased by the employee in addition to the wages owed anyway, this subsidy is a tax and social security-free employer benefit in accordance with Section 3 No. 15 EStG. This allowance applies up to the full amount of the ticket purchase price. This is currently 49 euros per month; from January 2025, the ticket price will be 58 euros. However, this regulation does not apply if employers grant the subsidy by way of salary conversion or salary sacrifice.
It should be noted, however, that these tax-free employer benefits in accordance with Section 3 No. 15 EStG reduce the amount deductible as a commuting allowance under income-related expenses. Employers must therefore show the tax-free allowances paid in the calendar year to be offset against the commuting allowance in line 17 of the wage tax statement for the tax office.
Alternatively, companies can tax the employer allowances paid for a calendar year at a flat rate of 25% (plus solidarity surcharge and flat-rate church tax, if applicable). In this case, the allowance remains tax-free and exempt from social security contributions for employees. The advantage of this approach for employees is that the employer's allowance is not offset against the commuting allowance and is therefore not shown on the wage tax statement. In this case, the allowance also remains tax-free if this employer benefit is paid by way of salary conversion (Section 40 (2) sentence 2 EStG).
Incidentally, these tax rules also apply if the Deutschlandticket is not used for commuting to work, but exclusively for private use.
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These regulations on employer subsidies also apply if employers provide their employees with the Deutschlandticket as a job ticket free of charge or at a reduced price as a non-cash benefit. This is because the non-cash benefit in the form of benefits in kind can also be tax-free in accordance with Section 3 No. 15 EStG or alternatively taxed by the employer at a flat rate of 25%.
The Deutschlandticket as a job ticket has a worthwhile advantage for companies and employees: if employers contribute at least 25% to the Deutschlandticket (until December 2024: €12.25; from January 2025: €14.50), there is a 5% discount on the ticket. The price for this Germany job ticket and therefore the non-cash benefit is therefore only €46.55 per month.
The higher the additional payments made by the employee, the lower the non-cash benefit of the job ticket (which may be tax-free in accordance with Section 3 no. 15 EStG). In line 17 of the income tax statement, employers show the total amount of tax-free non-cash benefits in the calendar year, which are offset against the amount deductible as a commuting allowance in the tax return.
If a salary conversion takes place for the job ticket, the ticket is not tax-free in accordance with Section 3 No. 15 EStG, but can remain tax-free within the monthly 50 euro exemption limit for benefits in kind, provided that the non-cash benefit and other benefits in kind with individual valuation do not exceed a total of 50 euros per month.
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Get infoIf employees use the Deutschlandticket for business trips, the employer can reimburse the full cost of the ticket as tax-free travel expenses in accordance with Section 3 No. 13 or No. 16 EStG. The prerequisite for this is that the cost of saved one-way tickets for business trips in the respective calendar month equals or exceeds the price of the Deutschlandticket. The extent to which private journeys are made with the Deutschlandticket is irrelevant.
Due to the Deutschlandticket price increase from January 2025, the amount will in future exceed the so-called 50-euro tax-free limit for non-cash benefits. This will affect companies that provide the Deutschlandticket as a job ticket to their employees as a non-cash benefit, as it will no longer be tax-free for the time being.
Employers now have two options as to how they can still offer their employees the Germany Job Ticket tax-free.
Firstly, companies can make use of Section 3 No. 15 of the Income Tax Act. This provision states that tickets for public transport may be offered tax-free by the employer. This means that the Deutschlandticket can continue to be offered tax-free and free of social security contributions without non-cash benefits. If it is designated as a job ticket.
However, companies also have the option of offering the Deutschlandticket on a pro rata basis as a non-cash benefit. If their allowance for the ticket remains below the 50 euro exemption limit. In this case, employees pay the difference themselves.
Technically, this option can be implemented using NAVIT's new split-pay function, for example.
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