Income-related expenses

Income-related expenses (Werbungskosten) are expenses that employees incur in order to earn, secure and maintain their wages (§ 9 EStG). They reduce taxable income and are declared in the tax return. Typical income-related expenses are travel costs, work equipment, contributions to professional associations or training.

Difference to business expenses

Income-related expenses exist for income from employment, i.e. for employees. Comparable costs of the self-employed and companies are called business expenses. There is no lump sum for income-related expenses for self-employed work; the self-employed prove their costs individually, and a flat-rate business expense allowance is possible for some professions.

Lump sum for income-related expenses

The tax office automatically deducts the employee lump sum of €1,230 per year (§ 9a EStG). Only if your actual income-related expenses are higher is it worth itemising them in your tax return.

Typical examples of income-related expenses

• Journeys to the first place of work with the distance allowance (since 2026 €0.38 from the first kilometre), see Difference between distance allowance and mileage allowance
• Travel expenses for work-related trips, i.e. for a business trip or work away from the workplace, insofar as the employer does not reimburse them
• Home office allowance or home study, see home office
• Work equipment and work-related telecommunications
• Training and further education costs
• Work-related moving costs

Income-related expenses and Spesenfuchs

If the employer reimburses travel expenses tax-free, they are no longer income-related expenses. Only what was not reimbursed belongs in the tax return. If you record your business trips with Spesenfuchs, you can see in the reports and in the PDF report which costs were incurred, and you have the receipts collected for your tax return.

Conclusion

Income-related expenses legally reduce employees’ taxes. Careful documentation is decisive. Digital tools such as Spesenfuchs help to keep track of work-related expenses.

Legal basis and sources: § 9 EStG: income-related expenses, § 9a EStG: lump sums for income-related expenses