Introduction of the “Deutschland Ticket”: What employers must observe in connection with subsidies
- 06/05/2023
- Reading time 2 Minutes
The “Deutschland-Ticket” (one ticket for public transport in Germany) has been available since the beginning of May. At a current fee of EUR 49 a month, public transport can be used throughout Germany, regardless of the state, most transport associations or tariff zones. Employers can pay their employees a subsidy for such ticket.
The employer can generally pay up to 100% of the ticket price in addition to the generally owed wages as a subsidy exempt from tax and social security contributions (Art. 3 No. 15 EStG (German Income Tax Act)).
If the subsidies are higher than the ticket price, the excess amount constitutes salary subject to tax and social security contributions.
The subsidies, which are exempt from tax and social security contributions, reduce the amount of the commuting allowance for daily trips between home and office, and must therefore mandatorily be reported in the annual wage tax statement.
Two variants: Deutschland-Ticket Job and Deutschland-Ticket
The Deutschland-Ticket will also be available as a “job ticket” at uniform conditions throughout Germany. If the employer contributes at least 25% on the issue price per month and ticket, the Deutschland-Ticket can be issued as a job ticket with a maximum discount of 5% on the issue price of EUR 49, which must also be reported in the annual wage tax statement. Such discount applies until December 31, 2024.
Please note: For the Deutschland-Ticket Job, the employer must conclude a framework agreement on the Deutschland-Ticket Job with the railway or a transport association and the employees must receive the tickets on the basis of this framework agreement. If the employees only submit the tickets to the employer for refund, it is the "normal" Deutschland-Ticket and not the Deutschland-Ticket Job.
No crediting to the exemption limit for remuneration in kind
The travel allowance, which is exempt of tax and social security contributions, is not credited against the exemption limit for remuneration in kind of 50 euros. In addition to this tax- and social security-free travel allowance, employers may therefore grant benefits in kind of up to EUR 50 per month in accordance with the applicable requirements.
