Many international employees in Germany are used to getting their tax refund for the commute only after filing a Steuererklärung (tax return) – a year later, or even later still. But there is another way: the Antrag auf Lohnsteuerermäßigung (application for a wage tax reduction). Here we explain what it is, how the Pendlerpauschale (commuter allowance) changed in 2026, who can benefit from such an application and why it is worth considering if you are starting your own business alongside your job.
- Since 1 January 2026, the Pendlerpauschale has been €0.38 for every kilometre, starting from the first, regardless of how you travel.
- Work-related expenses (Werbungskosten) only start to “count” above €1,230 per year: this amount is automatically allowed for every employee.
- To get a Freibetrag (tax allowance), the eligible expenses generally have to exceed €600.
- The application for 2026 can be submitted until 30 November 2026.
- A Freibetrag does not reduce your tax for the year; it only brings the benefit forward. Afterwards, filing a tax return is mandatory in many cases.
Glossary: five German terms you need to know
| Term | What it means in plain English |
|---|---|
| Lohnsteuer | Wage tax that the employer deducts every month and pays over to the Finanzamt (tax office). |
| Werbungskosten | Work-related expenses: commuting, further training, work materials, a second home at the place of work. |
| Arbeitnehmer-Pauschbetrag | A flat allowance of €1,230 per year that the tax office grants every employee without receipts. |
| Freibetrag | A tax-free amount that the Finanzamt enters in your tax data so that less tax is deducted from your salary. |
| ELStAM | The employee’s electronic tax data (tax class, children, Freibetrag), which the employer receives from the tax office. |
How a Freibetrag works and why it increases your net pay
Your employer calculates tax only on the basis of the data it knows: Steuerklasse (tax class), children, church tax. It knows nothing about the fact that you drive 35 kilometres every day or pay for courses. So under the normal procedure, tax is deducted “at the maximum”, and you get the overpayment back later through your Steuererklärung.
The Lohnsteuer-Ermäßigungsverfahren (wage tax reduction procedure, § 39a EStG) lets you do this in advance. You tell the tax office about the expenses you expect during the year, the Finanzamt calculates a Freibetrag and passes it on to your employer via ELStAM. From then on, tax is calculated on a lower base, and a little more money arrives in your account every month.
The final tax for the year stays the same. You simply receive the money earlier, in instalments with your salary, rather than as a lump sum after your tax return. If your expenses turn out to be lower than declared, you will have to pay the difference.
Pendlerpauschale 2026: what has changed and what it means in euros
With the Steueränderungsgesetz 2025 (Tax Amendment Act 2025), the commuting rate was standardised from 2026: it is now 38 cents per kilometre from the very first kilometre. Previously, the first 20 km only counted at 30 cents. The distance is calculated one way between your home and your main place of work (erste Tätigkeitsstätte). Days working from home (Homeoffice), holidays and sick days generally do not count as commuting days.
This is how it looks in practice, assuming 220 working days and no other work-related expenses:
| One-way distance | Pendlerpauschale per year | Above €1,230 | Enough for a Freibetrag? |
|---|---|---|---|
| 10 km | €836 | — | no |
| 20 km | €1,672 | €442 | only together with other expenses |
| 22 km | €1,839.20 | €609.20 | yes, just |
| 35 km | €2,926 | €1,696 | yes |
| 50 km | €4,180 | €2,950 | yes |
The calculation is simplified. Everyone’s actual number of working days is different, and other work-related expenses are often added to the commute: courses, literature, a laptop for work, a second household (doppelte Haushaltsführung).
What else can be included in the Freibetrag besides commuting
- Other Werbungskosten: further training, work tools, specialist literature, a second home at the place of work.
- Sonderausgaben (special expenses): childcare costs (Kinderbetreuung), school fees (Schulgeld), maintenance payments to a former spouse, donations.
- Außergewöhnliche Belastungen (extraordinary burdens): for example high medical costs or the flat-rate allowance for caring for a relative (Pflege-Pauschbetrag).
- Without the €600 threshold, the following count among others: the flat-rate allowance for people with disabilities, expenses for household-related services and tradespeople (haushaltsnahe Dienstleistungen, Handwerker), and negative income from other sources, for example losses when starting a business.
For married couples filing jointly, the amounts of both partners are added together for the €600 threshold.
Deadlines: why it is important not to be late in autumn 2026
The application for a calendar year can be submitted from 1 November of the previous year to 30 November of the current year. This rule applies following the changes introduced by the Jahressteuergesetz 2024 (Annual Tax Act 2024): previously, applications could be made from 1 October. A Freibetrag is granted for one year, or for two years at most.
The key point: the annual Freibetrag is spread evenly over the months remaining until the end of the year, starting from the month after you apply. The later you apply, the fewer months there are and the larger each “portion”.
| When you apply | Freibetrag per month |
|---|---|
| Application in August (Sep–Dec) | €462/month |
| Application in September (Oct–Dec) | €616/month |
| Application in October (Nov–Dec) | €924/month |
| Application in November (December only) | €1,848/month |
Example: an annual Freibetrag of €1,848 for 2026. The table shows the monthly Freibetrag, not the tax saving.
An application submitted in October 2026 can only cover 2026: under current rules, applications for 2027 can only be made from 1 November 2026. In November, however, a single application can cover both December 2026 and the whole of 2027. Which is more convenient depends on how predictable your expenses are next year.
A real-life example
A hypothetical example: a warehouse worker lives in the suburbs and commutes 35 km each way, 220 days a year. The Pendlerpauschale comes to €2,926; after deducting €1,230, €1,696 remains. If he applies in October 2026, this amount is spread over November and December at €848 each. At an assumed marginal tax rate of around 25%, that means roughly €210 less deducted in each of the two months. If the same Freibetrag is set up for 2027 from January, it amounts to around €141 of Freibetrag per month and roughly €35 of extra net pay every month.
The figures are for illustration only: the actual effect depends on your income, Steuerklasse, church tax and other circumstances.
How to apply
The official form is called the “Antrag auf Lohnsteuer-Ermäßigung und zu den Lohnsteuerabzugsmerkmalen”. It is submitted to the Finanzamt responsible for your place of residence, online via Mein ELSTER or on paper. In addition to the main form, depending on your situation you fill in supplements (Anlagen): for Werbungskosten, children, Sonderausgaben and so on. If you are not claiming more than last year and your circumstances have not changed, a simplified form is available in many cases.
Once processed, the tax office passes the new data on to your employer via ELStAM. There is usually no need to write to your employer separately.
- The exact distance via the shortest route and a realistic number of commuting days
- Which other work-related expenses you expect and how you can prove them
- Whether to set up the Freibetrag for one year or two years straight away
- Whether you have access to ELSTER or would prefer the paper form
- A small reserve in case of a back payment if your expenses turn out lower
- Being prepared to file a Steuererklärung for that year
The flip side: a mandatory tax return and a possible back payment
If a Freibetrag was included in your tax data (for example for Werbungskosten or Sonderausgaben), under § 46 EStG you are generally obliged to file a tax return for that year if your annual salary exceeds a set threshold. For 2026, the Finance Ministry’s official handbook (Lohnsteuer-Handbuch) gives €13,614 for single people and €25,998 for married couples. In the tax return you then state your actual expenses, not the ones you forecast.
This is the main risk: if you started working from home more often or cancelled a planned course, too little tax was deducted for the year and the Finanzamt will demand a back payment. If your circumstances worsen significantly, inform the tax office: in a number of cases this is explicitly required by law.
“Some taxpayers use the tax office as a piggy bank.”
Daniela Karbe-Geßler, Taxpayers’ Association (Bund der Steuerzahler), quoted in Handelsblatt
The idea is simple: some people prefer to get a large refund once a year, while others care more about monthly liquidity. Financially the result is the same – the difference lies in how you manage your money.
Another frequent question: will my employer find out what the Freibetrag is for? According to a spokesperson for the German Finance Ministry quoted by Handelsblatt, only the amount is transmitted via ELStAM, without any reasons.
For married couples: splitting expenses and choosing a Steuerklasse
Married couples and registered partners can decide in the application whether certain joint expenses are assigned to one of them or split equally between both. The same form can also be used to apply for a change of tax class.
- III / V: combined monthly net pay is often higher if incomes differ greatly, but the partner in class V bears a disproportionately large share of the tax, and a back payment is possible at the end of the year.
- IV / IV: each partner is taxed roughly like a single person; the benefit of income splitting only shows up in the tax return.
- IV / IV with factor: tax is distributed in proportion to each partner’s share of the total income.
The choice of class also affects certain benefits calculated on net income, such as Elterngeld (parental allowance) or Arbeitslosengeld (unemployment benefit). So it is best discussed in light of the family’s overall situation.
If you are starting a business alongside your job
Many of our readers start their entrepreneurial journey in Germany exactly this way: employed during the day, building a Nebengewerbe (side business) or freelance work in the evening. And here the procedure offers a little-known but important option.
Under § 39a Abs. 1 Nr. 5 EStG, an expected negative total of income can be included in the Freibetrag, including income from a Gewerbebetrieb (trade) and selbständige Arbeit (self-employment). Put simply: if in the first year of your business you plan to invest more than you earn (equipment, website, advertising, training), these start-up losses can in some cases be taken into account in the deductions from your salary rather than waiting for the tax return. The €600 threshold does not apply here.
- The Finanzamt checks how plausible the forecast is. A clear financial plan generally helps.
- Losses are recognised if there is a visible intention to make a profit (Gewinnerzielungsabsicht). An activity that remains loss-making for years may be classified as “Liebhaberei”, i.e. a hobby.
- If the loss turns out smaller or a profit arises, there will be a back payment. With a Gewerbe or freelance work, you generally have to file a tax return anyway.
- The information you give the tax office must be accurate: a deliberately embellished forecast can have legal consequences.
And if you are already fully self-employed? Then there is no Lohnsteuer, and a Freibetrag in this sense does not apply. Tax is paid in quarterly advance payments (Vorauszahlungen) under § 37 EStG. If your income falls noticeably, you can submit a justified application to reduce your advance payments (Herabsetzung der Vorauszahlungen). This is a kind of “equivalent” of the Freibetrag for business owners.
Myths and facts
| Myth | Fact |
|---|---|
| Myth: A Freibetrag means you pay less tax. | Fact: Overall, the tax for the year stays the same; only the timing of when you benefit changes. |
| Myth: A short commute brings nothing. | Fact: Since 2026, 38 cents apply from the first kilometre. But the effect only becomes noticeable once all your Werbungskosten exceed €1,230. |
| Myth: If you miss 30 November, the money is lost. | Fact: You can still claim the expenses in your tax return. You only lose the chance to benefit earlier. |
| Myth: This is only for people who drive. | Fact: The Pendlerpauschale does not depend on the mode of transport: bus, train, bicycle or on foot. |
Who such an application may suit – and who should rather wait
A Freibetrag is most often considered by people with stable, predictable expenses: a regular commute, regular maintenance payments, fixed flat-rate allowances. It can also be attractive while you are launching a business, when every hundred euros a month matters for liquidity. A more cautious approach makes sense if your expenses are still uncertain, if you would rather receive a large “piggy bank” refund, or if a possible back payment in future would be a noticeable burden.
When several factors overlap at once (commuting, a second income, the choice of Steuerklasse), discuss your situation with a Steuerberater (tax adviser) or a Lohnsteuerhilfeverein (wage tax assistance association).
Frequently asked questions
What is the deadline for the Antrag auf Lohnsteuerermäßigung for 2026?
30 November 2026. The Freibetrag generally takes effect from the month after you apply. Applications for 2027 are accepted from 1 November 2026.
From what commuting distance is it worth applying?
Without other expenses, assuming 220 working days, the threshold is exceeded from about 22 km each way. If you have additional Werbungskosten, a shorter distance may be enough.
Do I have to file a tax return after getting a Freibetrag?
In many cases, yes. For 2026 the obligation generally arises with a salary above €13,614 for single people and above €25,998 for married couples.
Can I submit the application in English?
No, the official forms and ELSTER are available in German. The forms themselves are fairly standard, though, and if in doubt you can ask a professional for help.
Will my employer find out about my expenses?
No. According to the German Finance Ministry, your employer only sees the amount of the Freibetrag via ELStAM, not how it is made up.
Can losses from a Nebengewerbe be taken into account?
In principle, yes, if the expected total of income from the business and other sources is negative. The tax office assesses how plausible the forecast is and whether there is an intention to make a profit.
For how long is a Freibetrag granted?
For one calendar year, or two at most. If your circumstances worsen, inform the tax office.
Employment, a Nebengewerbe, advance payments, start-up losses: when you start your own business in Germany, all of these are closely connected. In our education programmes and personal consultations we explain how these mechanisms work and which typical mistakes new business owners should avoid.
This does not replace individual tax advice, but it helps you go to your Steuerberater or Finanzamt with the right questions.
Book a consultationThis article is for general information and educational purposes only and does not constitute legal, tax, accounting or financial advice. The calculations shown are simplified and serve only as illustrations. Legislation and the practice of the tax authorities may change, and every situation needs to be analysed individually.
Before applying the approaches described, check the current requirements with the relevant official sources or consult a qualified professional (Steuerberater, Lohnsteuerhilfeverein) or the competent Finanzamt. Binding decisions are made solely by the authorised public authorities.
Sources
- § 39a EStG: gesetze-im-internet.de/estg/__39a.html
- § 46 EStG: gesetze-im-internet.de/estg/__46.html
- BMF, Amtliches Lohnsteuer-Handbuch 2026: amtliche-handbuecher.bundesfinanzministerium.de
- Bundesregierung, tax changes from 1 January 2026: bundesregierung.de
- ELSTER, guidance on the 2026 application: elster.de
- Finanzamt NRW, Antrag auf Lohnsteuer-Ermäßigung: finanzamt.nrw.de
- Handelsblatt, “Finanzamt: Was Pendler wissen müssen, um Steuern zu sparen” (updated 17.09.2026)
