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Steep template for employer branding: job tickets tax-free from 2019

By Rodes Hagen
November 27, 2018

Neustadt / Weinstraße, November 27, 2018 - Protect the environment and prevent traffic infarction: Legislators are pursuing these two goals by creating tax incentives for the use of local public transport. The most recent example: If the boss supports his employees when they come to work by public transport, these benefits are generally tax-free from 2019. This applies to employer grants as well as so-called job tickets and similar offers. The income tax assistance association for United States income tax assistance (VLH) explains what needs to be considered for this tax exemption.



New from 2019: Job tickets tax free. (Graphic: United Wage Tax Assistance / VLH) New from 2019: Job tickets tax free. (Graphic: United Wage Tax Assistance / VLH)

Germany is a commuter country. Numerous employees have to travel many kilometers every working day to get from their home to the so-called first place of employment. Many of them use local public transport to protect the streets and the environment.

If the boss supported his employees in commuting by bus and train, for example with grants or benefits in kind, these benefits have long been considered benefits in kind that were generally subject to tax and social security contributions. That is changing now. As of 2019, a tax exemption will generally apply in the following cases:




  • If the employer subsidizes the bus and train tickets purchased by the employee.

  • If the employer makes so-called job tickets or the like cheaper or in kind available to the employee in kind.


In this context, the following basic conditions and additional aspects must be observed:




  1. According to the VLH experts, the employer benefits described are only tax-free if they are granted in addition to the wages owed anyway. If, on the other hand, it is a deferred compensation, the tax exemption does not apply.

  2. According to the VLH experts, the tax-free employer benefits are now counted towards the distance allowance claimed by the employee. This point is controversial, however, and changes may be made in this regard.

  3. Employer benefits for taxi rides or flights are not tax-free.

  4. If the employee takes private trips with the job ticket, this remains tax-free, as the VLH experts emphasize.


Improvement compared to the previous regulation
Overall, the situation that will apply from 2019 for the employees concerned is an improvement compared to the legal situation that applied up to that point. Immediately before the new regulation, according to VLH experts, benefits that the employer granted the employee for journeys by bus and train between home and first place of employment were basically treated like wages that are subject to tax and social security contributions. This affected both grants and benefits in kind, such as the discounted or free job ticket.

According to the VLH specialists, the latter was only tax-free if the monthly allowance for benefits in kind granted by the employer in the amount of 44 euros was not exceeded. However, all benefits in kind that the employer jumped in a month were added together. As soon as the corresponding amount broke the € 44 mark, the entire benefits in kind were taxable.