How high is the mileage allowance for business trips?
What is the difference between commuter allowance and kilometre allowance?
What does the mileage allowance have to do with the energy crisis?
Even before the energy crisis was exacerbated by the war in Ukraine and the associated economic sanctions against Russia, the topics of energy / transport etc. were already in focus. It is certainly clear to almost everyone that there will be massive changes in the organisation of our lives and work.
One topic that is frequently discussed, especially by politicians, is the commuter allowance. Commuter allowances are apparently a very emotional topic. While some are of the opinion that it should be significantly reduced in order to make commuting by car less attractive and thus reduce energy consumption and emissions, others are of the opinion that it should be significantly increased in order to avoid social distortions, especially in view of the ever-increasing prices at petrol stations.
We don't want to have that discussion here and we certainly don't have the truth of it. And: What does the commuter allowance have to do with the mileage allowance for business trips anyway?
In our projects for the introduction of digital travel expense accounting, we almost always have a discussion about the mileage allowance with our clients. For this reason, we would like to provide some clarity with this blog post.
What is the difference between the mileage allowance and the commuter allowance?
The commuter allowance is basically available to everyone who pays taxes and has a regular commute to work. This is because it is precisely for this commute that € 0.30 per kilometre may be assessed as income-related expenses. It makes no difference whether the person is an employee or self-employed and whether the distance is covered by car, bicycle, on foot or in any other way.
There has now been an adjustment to this, so that the value increases to € 0.35 per kilometre from the 21st kilometre. (From 1 - 20 km it remains at 0.30 €). This regulation will apply from 2021 until 2023. For the years 2024 - 2026, € 0.38 will then apply from the 21st kilometre. For the calculation, it is important to note that only the SIMPLE route, i.e. the outward or return journey, is to be indicated.
Do not confuse the commuter allowance described above with the mileage allowance.
The mileage allowance is a voluntary benefit, which employers can pay to employees if they use a private vehicle for business purposes. This can be a short trip during working hours or a multi-day business trip. Incidentally, this has only applied to motorised vehicles since 2014. - Previous distinctions or bicycles etc. are obsolete. And as a rule, a business trip must extend beyond the city limits in order to be considered as such.
So if I use a private, motorised vehicle for business purposes, I can apply for payment of a mileage allowance by submitting a travel expense statement.
How high is the mileage allowance?
Section 670 of the German Civil Code (BGB) stipulates that employees can claim compensation for expenses.
And this is where the misunderstandings often start. This general regulation says nothing about the amount.
When calculating the amount of compensation, the flat rate per kilometre is applied. This is currently € 0.30 for cars and € 0.20 for motorcycles/mopeds. The current values can be found in the German FEDERAL TRAVEL EXPENSES ACT.
So if I drive 100km in my private car on a business trip, I get 100 x 0.30 = 30 €. It would be nice if it were that simple. Because there are still lots of IF's and BUT's.
- It is important to understand that reimbursement is NOT required by law.
- That employers can pay MORE, LESS or even NOTHING.
If nothing or less than the mileage allowance is paid, the travel expenses can be claimed as income-related expenses in the tax return.
- If nothing is paid, according to km x flat rate
- less is paid, corresponding to km x flat rate - paid by employer
If the employer pays more than the flat rate according to the Federal Travel Expenses Act, taxes are due (see Income Tax Act), which are usually calculated and paid directly by the employer.
So far so complicated. In principle, of course, the actual costs can also be reimbursed by the employer. Here the problem regularly arises of determining these. This raises questions such as:
- How high was the consumption? Or how much petrol (or alternative fuel) was actually consumed for exactly this journey?
- What was the price of exactly this amount of fuel?
- What was the actual wear and tear on the vehicle? Etc.
The flat-rate regulation was created precisely to avoid this problem.
The last thing to do is to look at the kilometres driven. Because here, too, there may be a few things to consider. The good news is that the number of kilometres driven is accepted in audits by determining, for example, GoogleMaps. This means that if you do not measure the actual distance travelled and pay out the flat rate per kilometre based on the distance from Google Maps, this is acceptable.
But of course, this calculated distance can deviate from the actual distance.
- Did I enter "fastest" or "shortest" in the navigation system?
- Have I included or excluded journeys on motorways?
- Have I avoided a traffic jam or similar?
- etc.
A particularly complex case can also arise from a combination of a journey to work and a business trip. For example, I live in the eastern outskirts of Berlin. If I go on a business trip to Hanover, for example, I drive around Berlin via the Berlin ring motorway. Another colleague lives southwest of Berlin and our office is exactly between our homes.
- His route from home to Hanover is therefore shorter than office - Hanover.
- My route from home to Hanover is longer than office - Hanover.
- What would you pay?
Conclusion
I think it has become clear that this topic is not as simple as the term "lump sum" suggests. This is because flat rates actually serve the purpose of simplifying complicated issues.
It is important to understand that there is a legal framework and at the same time considerable leeway for employers as to what is actually paid for what. Depending on how you decide, however, there are then again various consequences in the derivation, which can range from satisfied to dissatisfied travellers to legally prescribed tax regulations.
In the projects with our clients, we always have very extensive discussions on this. Often there are internal regulations that have developed over the years. One customer would like to accommodate the travellers, in other companies ownership claims have grown. Every legal adjustment in recent years and the internal discussions have led to further compromises. None of this is fundamentally wrong.
Nevertheless, our recommendations are very clear:
- Fix the regulations in your travel policy so that it is transparent for everyone.
- Keep the regulations as simple as possible, i.e.:
- If possible, ONE regulation for ALL
- Pay X times the flat rate
- where X can be same/less/greater than 1
- no IF, THEN rules
- Calculate distance in km consistently according to GoogleMaps: Departure point - Destination point
- No detours
- No manual adjustment (and if, then only with "forced" justification)
- Use travel expense software that helps you to:
- Make your rules transparent
- Enforce your rules
- Even if you can't design your rules simply (master the complex requirements)
And now critically review how things are with you at the moment.
Feel free to send us feedback or make an appointment for a free exchange of experiences. We will be happy to share our expertise with you.
https://www.openmind-travelmanagement.com/kontakt
To make sure you don't miss anything, feel free to follow us on LinkedIn or facebook.
https://www.linkedin.com/company/openmind-gmbh
https://www.facebook.com/openMINDtravelmanagement
