Tax Amendment Act 2025
Below, we briefly provide an overview of the changes that are important for employees and their wage tax deductions as of January 1, 2026.
Commuting allowance
The commuting allowance for journeys between home and the primary place of work has been increased to 38 cents from the first kilometer. Previously, the allowance was 30 cents for the first 20 kilometers and 38 cents from the 21st kilometer onwards. This also applies in the case of a work-related double household.
Volunteer and trainer allowance
The trainer allowance will be increased to EUR 3,300 and the volunteer allowance to EUR 960 per year.
Income up to this amount is tax-free in accordance with Section 3 No. 26 German Income Tax Act (EStG) and Section 3 No. 26a EStG.
By Stefan Sperandio, Johanna Wolter and Simeon Wahl
Employment tax treatment of (electric) bicycles that are not motor vehicles for private use
When an employer provides an employee with an (electric) bicycle for private use, no employment tax or social security contributions are payable under certain conditions in accordance with Section 3 No. 37 of the German Income Tax Act (EStG). Electric bicycles are only covered by this rule if they are not motor vehicles. This means that (1) the nominal continuous power output of the motor must not exceed 0.25 kWh, (2) the maximum speed must not exceed 25 km/h, and (3) the motor of the bicycle must only be driven when the pedals are being pushed.
Provision of (electric) bicycles that are not motor vehicles, in addition to the wages already owed
The provision of (electric) bicycles by the employer that are not motor vehicles is only not considered a monetary benefit in accordance with Section 3 No. 37 EStG if the benefit of use is granted in addition to the wages already owed (= regular wages).
In particular, “additionality” only applies if, for example, the benefit is not offset against an already agreed salary entitlement, or if the entitlement to wages is not reduced in favor of the benefit (“deferred compensation”). Section 8 (4) EStG regulates “additionality” in more detail.
The tax exemption applies both to journeys between home and the primary place of work and to purely private journeys. It is also not offset against the mileage allowance in the employee's income tax assessment.
In the case of a tax-free provision of the (electric) bicycle, the obligation to pay social security contributions also does not apply in accordance with Section 1 (1) sentence 1 no. 1 SvEV.
By Stefan Sperandio, Johanna Wolter and Norbert Wahnsiedler
Reimbursement of expenses to employees for charging company electric vehicles from the employees' private power grids
Company electric vehicles become increasingly popular – but charging them with private electricity at the employee's home (e.g. PV system, household power grid, or a combination of both) complicates the treatment of employment tax. How can electricity cost reimbursements be structured in a legally compliant manner without creating a taxable monetary benefit? We provide an overview of which models work, from flat kWh rates to individual billing, what evidence is required, and how clear agreements can avoid pitfalls. This allows companies and employees to maintain an overview and minimize risks in cases of private charging. Since January 1, 2026, the new financial management principles for the reimbursement of private electricity costs must be taken into account (BMF-letter, November 11, 2025).
Basic information on employment tax benefits in the field of e-mobility
In order to promote electric mobility in Germany, legislators have created many tax incentives in recent years, including the basic employment tax exemption for free or discounted charging of electric vehicles (whether private or company-owned) at the employer's premises; the same applies to company charging devices (e.g. wall boxes) provided for private use, cf. Section 3 No. 46 German Income Tax Act (EStG).
However, it becomes challenging when employees charge their company cars at home using their own PV system, their own household power grid, or a combination of both, and the employer reimburses the electricity costs. This is because there are not always “invoice prices” for self-generated electricity, so determining an appropriate kWh rate and distinguishing between genuine cost reimbursement and taxable wages must be done with particular care.
By Stefan Sperandio, Johanna Wolter and Silas Rosing
© 2017 - 2026 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
Follow us
