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Germany Business Expenses Guide (Betriebsausgaben & Werbungskosten)

A comprehensive guide to deductible expenses in Germany — Werbungskosten for employees (including the €1,230 Arbeitnehmer-Pauschbetrag), Betriebsausgaben for the self-employed, the Home-Office-Pauschale (€1.50/day), Reisekosten (travel costs), and the Arbeitszimmer (dedicated home office) deduction.

In Germany, the tax rules distinguish between Werbungskosten (work-related expenses for employees) and Betriebsausgaben (business expenses for self-employed individuals). Both categories reduce your taxable income (zu versteuerndes Einkommen), but the deductibility rules and limits differ. For related reading, see our Self-Employment Guide → and Freelancer Tax Guide →.

Employee Deductions (Werbungskosten)

  • Arbeitnehmer-Pauschbetrag (lump-sum allowance): Every employee automatically receives a flat €1,230 deduction for Werbungskosten without needing receipts. If your actual expenses exceed €1,230, itemise them on your Steuererklärung.
  • Home-Office-Pauschale: €1.50 per day for working from home (up to €630/year = 210 days). No separate room required — just a desk used for work. Claimable even if your employer has an office, provided you worked from home on those days.
  • Arbeitszimmer (dedicated home office): If your home office is the centre of your professional activity (mittelpunkt der beruflichen Tätigkeit), you can deduct up to €1,250 per year for rent, utilities, internet, and cleaning (proportional to the room's share of total living space). Full deduction (unlimited) is possible only if you have no other workplace.
  • Travel costs (Reisekosten): Commuting (Fahrten zwischen Wohnung und erster Tätigkeitsstätte): €0.30/km for the simple distance, from 2024 onwards €0.38/km from the 21st km. Business trips (Dienstreisen): €0.30/km plus actual accommodation and meal costs (or per-diem Pauschalen of €14–€28).

Self-Employed Deductions (Betriebsausgaben) and Other Rules

  • Betriebsausgaben: Self-employed individuals (Freiberufler and Gewerbetreibende) can deduct all ordinary and necessary business expenses (ĂĽbliche und notwendige Betriebsausgaben). This includes office supplies, professional fees, insurance, marketing, software, travel, and equipment. The key principle: expenses must be entirely or predominantly business-related.
  • Double housekeeping (doppelte HaushaltsfĂĽhrung): If you work in a different city from where your main household is, you can deduct rent for a second home, travel to your primary residence (one round trip per week), and extra meal costs — up to reasonable limits. This is common for employees working in expensive cities like Munich or Frankfurt.
  • Mixed-use expenses (gemischt genutzte Aufwendungen): Items used for both business and private purposes (e.g., laptop, phone) can be split proportionally. Business share must be documented with a log or estimate. Assets costing up to €1,190 (net) can be fully deducted in the year of purchase (geringwertige WirtschaftsgĂĽter — GWG).
  • Record-keeping: Keep all receipts (Belege) for at least 7 years (10 years for real estate). Digital records are accepted. The Finanzamt may request proof of business use for mixed-use items.