Commuting Allowance 2026: €0.38/km from the First Meter

Starting 2026, the commuting allowance simplifies: a uniform rate of €0.38 per kilometre will apply – and this from the very first metre.

The commuting allowance, officially known as the “Entfernungspauschale” under German tax law (§ 9 EStG), is a key component of German tax legislation. It allows employees to claim the costs associated with their journey to work for tax purposes. Classified as income-related expenses (Werbungskosten), it reduces taxable income and is declared in Annex N (Anlage N) of the tax return.

The calculation of this allowance is based on the single-trip distance between an employee’s residence and their primary place of work. This means that neither the round trip nor multiple daily commutes are counted twice; only the distance of a single journey is used for the mileage calculation. For the tax year 2025, a tiered system was still in place: €0.30 for the first 20 kilometres and €0.38 for each kilometre thereafter. However, this distinction will be abolished starting January 1, 2026.

Uniform rate of €0.38/km from the first kilometre

The central change for commuters from 2026 onwards is the introduction of a uniform mileage rate of 0.38 Euros. This amount applies from the very first kilometre of the single journey between home and work. This amendment, decided by the Bundesrat on December 19, 2025, considerably simplifies the calculation process. The previous tiered system, which offered a lower rate for the initial 20 kilometres, is now a thing of the past. This new regulation is particularly beneficial for employees with shorter commutes, as they can now also benefit from a higher per-kilometre rate for these distances.

Step-by-step calculation – 30 km, 220 workdays example

To determine the actual savings, let’s consider a concrete example: Suppose you live 30 kilometres from your workplace and work 220 days a year. The calculation of the commuting allowance for 2026 follows the formula: Allowance per kilometre (single trip) × Kilometres (single trip) × Actual workdays.

For our example, this results in:

0.38 €/km × 30 km × 220 workdays = €2,508

This amount of €2,508 could potentially be deducted from your taxable income, leading to a tax saving. The number of actual workdays is crucial here. Days spent working from home, sick days, public holidays, and weekends are not included. Only the days you were physically present at your primary place of work count.

Car vs. public transport/bike: the €4,500 cap

When claiming the commuting allowance, there is an important distinction regarding the mode of transport. For the use of public transportation, such as buses and trains, or for cycling, an annual cap of €4,500 applies. If your calculated allowance for these modes of transport exceeds this amount, only €4,500 will be recognised. For the use of a private motor vehicle (car), there is no legally defined maximum limit for the commuting allowance. This means that the full amount of the calculated allowance can be claimed for travel by your own car, provided it exceeds €4,500.

Using the online calculator for your personal estimate

Calculating the commuting allowance, especially with the new regulations taking effect in 2026, can quickly become complex. To ensure you correctly minimise your tax liability and don’t miss any deductions, it is advisable to use specialised online calculators. Tools such as the Ordio Pendlerpauschale Rechner 2026, as well as calculators from Handelsblatt or Smart-Rechner.de, enable a simple and precise determination of your individual allowance. You simply enter the relevant tax year (e.g., 2026), your single-trip distance to work, and the number of your actual workdays. You can often also specify the mode of transport used. These calculators will then provide you with a detailed annual summary that you can use directly for your tax return. This way, you benefit optimally from the new regulations.

Tags: tax law, commuting allowance, distance allowance, 2026, taxes

Try it yourself: Commuter Allowance Calculator 2026