Out-of-pocket expenses

Out-of-pocket expenses (Barauslagen), also called cash outlays or advances, are expenses that a person initially pays out of their own pocket for their employer or client and has reimbursed later. They often arise on trips, during errands or in day-to-day business.

What is typical of out-of-pocket expenses is that they are incurred in the name or in the interest of the company, but the payment is pre-financed privately.

Typical examples of out-of-pocket expenses

Classic out-of-pocket expenses include parking fees, taxi or public transport costs, small entertainment expenses, postage, office supplies, admission fees or tolls.

Travel expenses incurred during work away from the workplace and paid privately are also regularly out-of-pocket expenses.

Difference to per diems and allowances

Out-of-pocket expenses concern costs actually incurred that can be proven with a receipt. Allowances such as the per diem, on the other hand, are applied at a fixed amount, regardless of what was actually spent.

More under reimbursement of expenses and expense report.

Tax treatment of out-of-pocket expenses

If the employer reimburses expenses that the employee paid on behalf of the company, this is tax-free as reimbursement of expenses (§ 3 no. 50 EStG). Reimbursed travel expenses are tax-free under § 3 no. 16 EStG. For the company, the reimbursed amounts are business expenses.

A traceable documentation is required: receipt, occasion and business reason. Flat-rate reimbursements without individual proof, on the other hand, are generally taxable wages.

Out-of-pocket expenses in practice

In practice, out-of-pocket expenses are usually reimbursed via a travel expense or expense report. Missing receipts or details regularly lead to queries and delays.

With Spesenfuchs, you record out-of-pocket expenses directly with the app or as a single receipt, even without a trip. For each receipt, you choose the payment method, for example private, cash or company card. For each payment method, it is stored which ledger account is used, whether the amount is reimbursed and whether the receipt is exported.

Legal basis and sources: § 3 EStG: tax-free income, R 3.50 LStR: transitory items, reimbursement of expenses (LStH 2026)