Commuting from 2026: Changes to the mileage allowance

The Tax Amendment Act 2025 will bring significant relief from 2026 onwards: the mileage allowance for commuters will be significantly increased. Instead of the current rate of 30 cents per kilometre (rising to 38 cents from the 21st kilometre), a flat rate of 38 cents will apply from the first kilometre onwards – regardless of the mode of transport. Whether by car, bicycle or carpool: the allowance will be granted. The shortest road route is taken as the basis, unless a longer route can be proven to be more convenient in terms of transport. The flat-rate allowance covers all expenses such as petrol, repairs, road tax and insurance premiums, and these cannot therefore be claimed separately.

For an employee who has travelled to the office on 200 days (distance to the place of work: 20 kilometres), the increase in the mileage allowance, at a tax rate of 42 per cent, already results in a tax saving of more than €130 per year. In exceptional cases, costs exceeding the flat-rate allowance may be claimed in a calendar year if they result from the use of public transport such as buses or trains.

Since the onset of the coronavirus pandemic, working from home has become an integral part of many employees’ lives, particularly in administrative roles. To offset the resulting rent, room and energy costs, employees may claim a daily allowance of six euros as income-related expenses for each working day on which they carry out their duties from home. This applies regardless of the size or location of the home. If several people live in the same household, each person is entitled to the daily allowance. If work equipment such as office furniture or computer equipment is purchased for the home office, this may be claimed as income-related expenses in addition to the daily allowance.

The daily flat rate of six euros corresponds in value to a distance of approximately 16 kilometres from the place of work. If the distance to the place of work is shorter, the working day in the home office therefore results in higher income-related expenses than a working day on site. If the distance to the place of work is greater, the working day on site results in higher income-related expenses and thus a lower tax liability. Claiming both the travel allowance and the home office allowance simultaneously – for example, if you work in the office in the morning and from home in the afternoon – is only possible under very specific conditions and is not generally recognised.

If employees are not provided with a permanent workspace in the office and their home office therefore becomes the main centre of their professional activities, the actual costs of the space may be claimed, calculated on a pro rata basis according to the size of the home office. However, the home office must be used almost exclusively for professional purposes. A desk in the living room or bedroom does not meet these requirements.

In practice, it is often the case that employees are unsure of the exact number of days they have worked on-site or from home when completing their tax returns. As a precaution, they therefore regularly underreport the number of working days on their tax returns. This results in them missing out on tax-deductible expenses, leading to a higher tax bill. Accurate record-keeping of working days therefore helps to reduce the tax burden.