Since the Covid-19 pandemic, working from home has been a popular practice for many employees in Germany, with one in four workers dodging a daily commute through ‘Home Office’.
While many German CEOs, like that of SAP, have been calling their workers back to the office, others have written in working from home as part of their official policies, or introduced hybrid work, in which employees come together in person only a couple days of the week.
READ ALSO: Is ‘Home Office’ here to stay in Germany?
Germany introduced a Home Office tax deduction during the heart of the pandemic to offset heating, electricity and other costs, and the rules around receiving it are now more generous.
As of the tax year 2023, employees in Germany are set to receive more money back, and also have a more broad definition of what they can call ‘Home Office’.
How much can I deduct from my taxes for working from home?
Anyone working out of their own four walls can now deduct €6 per day rather than the previous €5. Furthermore the previous limit of claiming back €600 for the entire year has been lifted, and they can now claim a total of 210 days – up from the previous limit of 120 days.
These legal adjustments have a significant impact on the tax return to be submitted for 2023. Employees now have the opportunity to receive up to €1,260 per year retroactively, provided that all 210 days are claimed.
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This represents an increase of more than €600 compared to the previous working from home allowance.
The deduction marks one of many which employees in Germany can take, including anything which qualifies as professional training and childcare expenses.
READ ALSO: EXPLAINED: The top tax deductions often overlooked by employees in Germany
More lenient definition of ‘Home Office’
Another advantage for employees is that the premises for the home office do not have to meet a specific definition. Whether it is a second home or just a table and chair in the bedroom, the costs of working from home can be claimed.
“This especially relieves families with smaller flats, who don’t have the space available for an extra office,” according to a statement on the German government’s website.
Employees who do have a separate study, though, can furthermore claim €1,250 back on their taxes.
However, certain criteria must be met – for example, the room must be used exclusively for professional purposes and must be separable from the rest of the apartment.
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How to declare the allowance in your tax return
To declare the home office allowance (officially called the Homeoffice-Pauschal) in your Steuererklärung (tax return), you must enter the number of days on which you worked exclusively from home. This information should be included in Annex N (line 45) under income-related expenses.
The increased lump sum of €1,260 per year can then be claimed on the return for 2023.
Keep in mind that the tax deadline for anyone filing taxes themselves this year for 2023 is August 31st, 2024 although those working with a Steuerberater (tax advisor) have a much more generous amount of time, namely until May 31st, 2025.
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A computer displays Germany’s ELSTER tax return portal. Photo: picture alliance/dpa/dpa-tmn | Christin Klose
Will the same rules apply for returns for the tax year 2025?
It currently appears that the new regulations for the working from home deduction will remain valid for the 2024 tax return. This means that employees will also be able to benefit from the increased lump sum next year.
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At the end of February, 24.1 percent of employees in Germany worked from home at least part of the time, according to a recent ifo Institute business survey of nearly 9,000 companies published this week.
“The proportion has remained almost constant for two years,” said ifo economist Jean-Victor Alipour in a statement.
“Regardless of the debates at individual companies about returning to the office, working from home has become firmly established in Germany.”
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